1. Why don't we make journal entries for bank errors? 2. Why do we bother including deposits in transit and outstanding checks? Won’t they just “work themselves out” the following month? 3. Why is Adjusted balance on the bank reconciliation twice?
1. Why don't we make
2. Why do we bother including deposits in transit and outstanding checks? Won’t they just “work themselves out” the following month?
3. Why is Adjusted balance on the bank reconciliation twice?
4. The cash account for American Medical Co. at April 30 indicated a balance of $82,726. The bank statement indicated a balance of $128,040 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:
a. Checks outstanding totaled $34,090.
b. A deposit of $18,430, representing receipts of April 30, had been made too late to appear on the bank statement.
c. The bank collected $31,779 on a $29,700 note, including interest of $2,079.
d. A check for $1,900 returned with the statement had been incorrectly recorded by American Medical Co. as $190. The check was for the payment of an obligation to Targhee Supply Co. for a purchase on account.
e. A check drawn for $370 had been erroneously charged by the bank as $730.
f. Bank service charges for April amounted to $55.
Using the information above, prepare a bank reconciliation for American Medical Co. as of April 30.
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The cash account for Stone Systems at July 31 indicated a balance of $17,750. The bank statement indicated a balance of $33,650 on July 31. Comparing the bank statement and the accompanying canceled checks and memos with the records reveals the following reconciling items:
a. Checks outstanding totaled $17,865.
b. A deposit of $9,150, representing receipts of July 31, had been made too late to appear on the bank statement.
c. The bank had collected $6,095 on a note left for collection. The face of the note was $5,750.
d. A check for $390 returned with the statement had been incorrectly recorded by Stone Systems as $930. 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 $1,810 had been incorrectly charged by the bank as $1,180.
f. Bank service charges for July amounted to $80.
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