The bank statement for Farmer Co. indicates a balance of $7,735 on June 30. After the journals for June were posted, the cash account had a balance of $4,098. Prepare a bank reconciliation on the basis of the following reconciling items: Cash sales of $742 were erroneously recorded in the cash receipts journal as $724. Deposits in transit not recorded by bank, $425. Bank debit memo for service charges, $35. Bank credit memo for note collected by bank, $2,475 including $75 interest. Bank debit memo for $256 NSF (not sufficient funds) check from Janice Smith, a customer. Checks outstanding, $1,860.
The bank statement for Farmer Co. indicates a balance of $7,735 on June 30. After the journals for June were posted, the cash account had a balance of $4,098. Prepare a bank reconciliation on the basis of the following reconciling items: Cash sales of $742 were erroneously recorded in the cash receipts journal as $724. Deposits in transit not recorded by bank, $425. Bank debit memo for service charges, $35. Bank credit memo for note collected by bank, $2,475 including $75 interest. Bank debit memo for $256 NSF (not sufficient funds) check from Janice Smith, a customer. Checks outstanding, $1,860.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The bank statement for Farmer Co. indicates a balance of $7,735 on June 30. After the journals for June were posted, the cash account had a balance of $4,098. Prepare a bank reconciliation on the basis of the following reconciling items:
- Cash sales of $742 were erroneously recorded in the cash receipts journal as $724.
- Deposits in transit not recorded by bank, $425.
- Bank debit memo for service charges, $35.
- Bank credit memo for note collected by bank, $2,475 including $75 interest.
- Bank debit memo for $256 NSF (not sufficient funds) check from Janice Smith, a customer.
- Checks outstanding, $1,860.
| Farmer Co. | ||
| Bank Reconciliation | ||
| June 30 | ||
| Cash balance according to bank statement | $fill in the blank 1 | |
| fill in the blank 3 | ||
| fill in the blank 5 | ||
| Adjusted balance | $fill in the blank 6 | |
| Cash balance according to company's records | $fill in the blank 7 | |
| $fill in the blank 9 | ||
| fill in the blank 11 | fill in the blank 12 | |
| $fill in the blank 14 | ||
| fill in the blank 16 | fill in the blank 17 | |
| Adjusted balance | $fill in the blank 18 |
Expert Solution
Step 1- Bank reconciliation statement
A bank reconciliation statement is a summary of banking and business activity that reconciles an entity's bank account with its financial records. The statement outlines the deposits, withdrawals, and other activities affecting a bank account for a specific period.
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