The Cash in Bank account balance on April 30 was $13,991. In reviewing checks returned by the bank, the accountant discovered that check No. 811, written for $541 for delivery expense, was recorded in the cash disbursements journal as $451. The NSF check for $500 was that of customer R. Koppa, deposited in April. Interest for April added to the account by the bank was $95. Required a. Prepare a bank reconciliation for Adam Company at April 30. b. Prepare the necessary journal entries to bring the Cash in Bank account into agreement with the reconciled cash balance on the bank reconciliation.
The Cash in Bank account balance on April 30 was $13,991. In reviewing checks returned by the bank, the accountant discovered that check No. 811, written for $541 for delivery expense, was recorded in the cash disbursements journal as $451. The NSF check for $500 was that of customer R. Koppa, deposited in April. Interest for April added to the account by the bank was $95. Required a. Prepare a bank reconciliation for Adam Company at April 30. b. Prepare the necessary journal entries to bring the Cash in Bank account into agreement with the reconciled cash balance on the bank reconciliation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Please solve both the sub-division with a detailed explanation.
Transcribed Image Text:The Cash in Bank account balance on April 30 was $13,991. In reviewing checks returned by the bank,
the accountant discovered that check No. 811, written for $541 for delivery expense, was recorded in the
cash disbursements journal as $451. The NSF check for $500 was that of customer R. Koppa, deposited
in April. Interest for April added to the account by the bank was $95.
Required
a. Prepare a bank reconciliation for Adam Company at April 30.
b. Prepare the necessary journal entries to bring the Cash in Bank account into agreement with the
reconciled cash balance on the bank reconciliation.
Transcribed Image Text:LOS P7-5B. Bank Reconciliation The bank reconciliation made by Adam Company, a sole proprietorship, on
March 31 showed a deposit in transit of S1,300 and two outstanding checks, No. 797 for $550 and No.
804 for $690. The reconciled cash balance on March 31 was $12,020.
The following bank statement is available for April 30:
MRC
Bank Statement
то
Adam Company
Fairbanks, AK
April 30
FAIRBANKS NATIONAL BANK
Date
Deposits No.
Date
Charges
Date
Balance
Mar.
$ 690 Apr.
31
... $11,960
Apr.
$1,300
804
Apr.
13,260
12,570
13,520
..
1,680
1,250
1,020
807
730
808
1,240
838
3.
13
B09
12,692
18
840
810
1,040
541
13
13,171
....
23
990
811
16
12,131
27
1,340
813
27
640
18
12,471
30
1,160
814
23
600
23
12,861
30
95IN
NSF
SC
18
30
500
27
13,561
14,776
40
30
Item Codes: EC: Error Correction
SC: Service Charge
IN: Interest Eamed
DM: Debit Memo
OD: Overdraft
NSF: Non-sufficient Funds
CM: Credit Memo
RT: Retumed Item
A list of deposits made and checks written during April is shown below:
O Cambridge Business Publishers
Chapter 7 Internal Control and Cash
365
Deposits Made
Checks Written
Apr.
2..
No. 807
$ 730
$1,680
1,250
808
1,240
10
1,020
809
838
810
811
812
17
840
1,040
22
990
451
948
640
24
1,340
29
1,160
813
30
1,425
814
600
815
816
372
875
$9,705
.......
$7,734
37769
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