On October 31, 2024, Crowe Company's general ledger shows a cash account balance of $8,427. The company's cash receipts for the month total $74,520, of which $71,345 have been deposited in the bank. In addition, the company has written checks for $72,497, of which $71,162 have been processed by the bank. The bank statement reveals an ending balance of $12,457 and includes the following items not yet recorded by Crowe: bank service fees of $250, note receivable collected by the bank of $6,000, and interest earned on the note of $820. After closer inspection, Crowe realizes that the bank incorrectly charged the company's account $700 for an automatic withdrawal that should have been charged to another customer's account. The bank agrees to the error. Required: a. Prepare a bank reconciliation to calculate the correct ending balance of cash on October 31, 2024. b. Record the necessary entries to adjust the balance for cash.

College Accounting (Book Only): A Career Approach
13th Edition
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:Scott, Cathy J.
Chapter6: Bank Accounts, Cash Funds, And Internal Controls
Section: Chapter Questions
Problem 1PB
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On October 31, 2024, Crowe Company's general ledger shows a cash
account balance of $8,427. The company's cash receipts for the month total
$74,520, of which $71,345 have been deposited in the bank. In addition, the
company has written checks for $72,497, of which $71,162 have been
processed by the bank.
The bank statement reveals an ending balance of $12,457 and includes the
following items not yet recorded by Crowe: bank service fees of $250, note
receivable collected by the bank of $6,000, and interest earned on the note of
$820. After closer inspection, Crowe realizes that the bank incorrectly charged
the company's account $700 for an automatic withdrawal that should have
been charged to another customer's account. The bank agrees to the error.
Required:
a. Prepare a bank reconciliation to calculate the correct ending balance of
cash on October 31, 2024.
b. Record the necessary entries to adjust the balance for cash.
Transcribed Image Text:On October 31, 2024, Crowe Company's general ledger shows a cash account balance of $8,427. The company's cash receipts for the month total $74,520, of which $71,345 have been deposited in the bank. In addition, the company has written checks for $72,497, of which $71,162 have been processed by the bank. The bank statement reveals an ending balance of $12,457 and includes the following items not yet recorded by Crowe: bank service fees of $250, note receivable collected by the bank of $6,000, and interest earned on the note of $820. After closer inspection, Crowe realizes that the bank incorrectly charged the company's account $700 for an automatic withdrawal that should have been charged to another customer's account. The bank agrees to the error. Required: a. Prepare a bank reconciliation to calculate the correct ending balance of cash on October 31, 2024. b. Record the necessary entries to adjust the balance for cash.
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