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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Please solve both the sub-division with a detailed explanation.

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: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.
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
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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