The cash account for Stone Systems at July 31, 20Y5, indicated a balance of $12,700. The bank statement indicated a balance of $15,810 on July 31, 20Y5. Comparing the bank statement and the accompanying canceled checks and memos with the records reveals the following reconciling items: a. Checks outstanding totaled $5,690. b. A deposit of $5,930, representing receipts of July 31, had been made too late to appear on the bank statement. c. The bank had collected $3,080 on a note left for collection. The face of the note was $2,920. d. A check for $500 returned with the statement had been incorrectly recorded by Stone Systems as $550. The check was for the payment of an obligation to Holland Co. for the purchase of office supplies on account. e. A check drawn for $300 had been incorrectly charged by the bank as $30. f. Bank service charges for July amounted to $50. Required: 1. Prepare a bank reconciliation. Stone Systems Bank Reconciliation July 31, 20Y5 Cash balance according to bank statement Add: Deposit in transit on July 31 Deduct: Qutstanding checks

Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter5: Cash Control Systems
Section: Chapter Questions
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### Bank Reconciliation and Journal Entries

#### 1. Adjusted Balance Calculation

- **Adjusted Balance** (Bank):
  - Input field (blank)

- **Adjusted Balance** (Company's records):
  - Input field (blank)

#### Cash Balance According to Company's Records

  - Input field (blank)

#### Adjustments

- Adjustments section is designed to allow input for necessary adjustments both for positive and negative:
  - Addition input field
  - Total additions input field (calculated total)
  - Adjusted balance input field

#### 2. Journalize Entries

Provide journal entries to:

- Increase cash
  - Input date: 20Y5 July 31 with dropdown selection for transaction type (Credit/Debit) followed by amount
  
- Decrease cash
  - Input date: 20Y5 July 31 with dropdown selection for transaction type (Credit/Debit) followed by amount

#### Journal Entry Section

20Y5 July 31:

- Dropdown selection for account
- Input field for transaction amount

July 31:

- Dropdown selection for account
- Input field for transaction amount

#### 3. Balance Sheet Preparation

- Question: "If a balance sheet were prepared for Stone Systems on July 31, 20Y5, what amount should be reported as cash?"
  - Answer: $15,780
Transcribed Image Text:### Bank Reconciliation and Journal Entries #### 1. Adjusted Balance Calculation - **Adjusted Balance** (Bank): - Input field (blank) - **Adjusted Balance** (Company's records): - Input field (blank) #### Cash Balance According to Company's Records - Input field (blank) #### Adjustments - Adjustments section is designed to allow input for necessary adjustments both for positive and negative: - Addition input field - Total additions input field (calculated total) - Adjusted balance input field #### 2. Journalize Entries Provide journal entries to: - Increase cash - Input date: 20Y5 July 31 with dropdown selection for transaction type (Credit/Debit) followed by amount - Decrease cash - Input date: 20Y5 July 31 with dropdown selection for transaction type (Credit/Debit) followed by amount #### Journal Entry Section 20Y5 July 31: - Dropdown selection for account - Input field for transaction amount July 31: - Dropdown selection for account - Input field for transaction amount #### 3. Balance Sheet Preparation - Question: "If a balance sheet were prepared for Stone Systems on July 31, 20Y5, what amount should be reported as cash?" - Answer: $15,780
### Bank Reconciliation and Entries

The cash account for Stone Systems at July 31, 20Y5, indicated a balance of $12,700. The bank statement indicated a balance of $15,810 on July 31, 20Y5. Comparing the bank statement and the accompanying canceled checks and memos with the records reveals the following reconciling items:

a. Checks outstanding totaled $5,690.
b. A deposit of $5,930, representing receipts of July 31, had been made too late to appear on the bank statement.
c. The bank had collected $3,080 on a note left for collection. The face of the note was $2,920.
d. A check for $500 returned with the statement had been incorrectly recorded by Stone Systems as $550. The check was for the payment of an obligation to Holland Co. for the purchase of office supplies on account.
e. A check drawn for $300 had been incorrectly charged by the bank as $30.
f. Bank service charges for July amounted to $50.

#### Required:
1. Prepare a bank reconciliation.

### Stone Systems
**Bank Reconciliation**  
**July 31, 20Y5**

| **Items**                                                        | **Amount**  |
|------------------------------------------------------------------|-------------|
| **Cash balance according to bank statement**                     | $15,810     |
| **Add: Deposit in transit on July 31**                           | $5,930      |
|                                                                   |             |
| **Deduct: Outstanding checks**                                    | $5,690      |
| **Deduct: Error in recording check by Stone Systems**             | $50 (550-500)|
| **Bank service charges**                                          | $50         |
|                                                                   | **Total deductions** | $5,790     |
| **Adjusted balance**                                              | $15,950     |
| **Cash balance according to company's records**                   | $12,700     |

#### Explanation of Graphs/Diagrams:
The diagram presented is a table structure for the bank reconciliation process:

1. **Cash balance according to bank statement:** The starting point is the cash balance shown by the bank statement, which is $15,810.
   
2. **Add: Deposit in transit on July 31:** Deposits made too late to appear on the bank statement are added. In this case, a deposit of $5,930 was made.

3. **Ded
Transcribed Image Text:### Bank Reconciliation and Entries The cash account for Stone Systems at July 31, 20Y5, indicated a balance of $12,700. The bank statement indicated a balance of $15,810 on July 31, 20Y5. Comparing the bank statement and the accompanying canceled checks and memos with the records reveals the following reconciling items: a. Checks outstanding totaled $5,690. b. A deposit of $5,930, representing receipts of July 31, had been made too late to appear on the bank statement. c. The bank had collected $3,080 on a note left for collection. The face of the note was $2,920. d. A check for $500 returned with the statement had been incorrectly recorded by Stone Systems as $550. The check was for the payment of an obligation to Holland Co. for the purchase of office supplies on account. e. A check drawn for $300 had been incorrectly charged by the bank as $30. f. Bank service charges for July amounted to $50. #### Required: 1. Prepare a bank reconciliation. ### Stone Systems **Bank Reconciliation** **July 31, 20Y5** | **Items** | **Amount** | |------------------------------------------------------------------|-------------| | **Cash balance according to bank statement** | $15,810 | | **Add: Deposit in transit on July 31** | $5,930 | | | | | **Deduct: Outstanding checks** | $5,690 | | **Deduct: Error in recording check by Stone Systems** | $50 (550-500)| | **Bank service charges** | $50 | | | **Total deductions** | $5,790 | | **Adjusted balance** | $15,950 | | **Cash balance according to company's records** | $12,700 | #### Explanation of Graphs/Diagrams: The diagram presented is a table structure for the bank reconciliation process: 1. **Cash balance according to bank statement:** The starting point is the cash balance shown by the bank statement, which is $15,810. 2. **Add: Deposit in transit on July 31:** Deposits made too late to appear on the bank statement are added. In this case, a deposit of $5,930 was made. 3. **Ded
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