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 ReconciliationJune 30Cash balance according to bank statement $fill in the blank 1 fill in the blank 3 fill in the blank 5Adjusted balance $fill in the blank 6Cash balance according to company's records $fill in the blank 7 $fill in the blank 9 fill in the blank 11fill in the blank 12 $fill in the blank 14 fill in the blank 16fill in the blank 17Adjusted balance $fill in the blank 18

Answered: The bank statement for Farmer Co.…

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter8: Sarbanes-oxley, Internal Control, And Cash

Section: Chapter Questions

Problem 18E

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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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