Infinity Emporium Company received the monthly statement for its bank account, showing a balance of $67,300 on August 31. The balance in the Cash account in the company's accounting system at that date was $72,628. The company's accountant reviewed the statement and the company's accounting records and noted the following. 1. 2. 3. After comparing the cheques written by the company with those deducted from the bank account in August, the accountant determined that all six cheques (totalling $6,180) that had been outstanding at the end of July were processed by the bank in August. However, five cheques written in August, totalling $4,500, were outstanding on August 31. A review of the deposits showed that a deposit made by the company on July 31 for $11,532 was recorded by the bank on August 1, and an August 31 deposit of $13,300 was recorded in the company's accounting system but had not yet been recorded by the bank. The August bank statement also showed: a service fee of $24 a customer's cheque in the amount of $204 that had been returned NSF a bank loan payment of $1,000, which included interest of $130, that the bank had deducted automatically ⚫a customer's paid $4,700 account balance by electronic transfer. Prepare a bank reconciliation as at August 31. (Hint: Items that were outstanding last month but have been processed this month should no longer affect the bank reconciliation, since both the company and the bank now have them recorded.) (List items that increase balance as per bank & books first.)
Infinity Emporium Company received the monthly statement for its bank account, showing a balance of $67,300 on August 31. The balance in the Cash account in the company's accounting system at that date was $72,628. The company's accountant reviewed the statement and the company's accounting records and noted the following. 1. 2. 3. After comparing the cheques written by the company with those deducted from the bank account in August, the accountant determined that all six cheques (totalling $6,180) that had been outstanding at the end of July were processed by the bank in August. However, five cheques written in August, totalling $4,500, were outstanding on August 31. A review of the deposits showed that a deposit made by the company on July 31 for $11,532 was recorded by the bank on August 1, and an August 31 deposit of $13,300 was recorded in the company's accounting system but had not yet been recorded by the bank. The August bank statement also showed: a service fee of $24 a customer's cheque in the amount of $204 that had been returned NSF a bank loan payment of $1,000, which included interest of $130, that the bank had deducted automatically ⚫a customer's paid $4,700 account balance by electronic transfer. Prepare a bank reconciliation as at August 31. (Hint: Items that were outstanding last month but have been processed this month should no longer affect the bank reconciliation, since both the company and the bank now have them recorded.) (List items that increase balance as per bank & books first.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Infinity Emporium Company received the monthly statement for its bank account, showing a balance of $67,300 on August 31. The
balance in the Cash account in the company's accounting system at that date was $72,628. The company's accountant reviewed the
statement and the company's accounting records and noted the following.
1.
2.
3.
After comparing the cheques written by the company with those deducted from the bank account in August, the accountant
determined that all six cheques (totalling $6,180) that had been outstanding at the end of July were processed by the bank in
August. However, five cheques written in August, totalling $4,500, were outstanding on August 31.
A review of the deposits showed that a deposit made by the company on July 31 for $11,532 was recorded by the bank on
August 1, and an August 31 deposit of $13,300 was recorded in the company's accounting system but had not yet been
recorded by the bank.
The August bank statement also showed:
a service fee of $24
a customer's cheque in the amount of $204 that had been returned NSF
a bank loan payment of $1,000, which included interest of $130, that the bank had deducted automatically
⚫a customer's paid $4,700 account balance by electronic transfer.
Prepare a bank reconciliation as at August 31. (Hint: Items that were outstanding last month but have been processed this month
should no longer affect the bank reconciliation, since both the company and the bank now have them recorded.) (List items that
increase balance as per bank & books first.)
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