The cash transactions and cash balances of Norfleet Farm for July were as follows: PROBLEM 7.3 1. The ledger account for Cash showed a balance at July 31 of $16,766.95. Bank Reconciliation 2. The July bank statement showed a closing-balance of $18,928. 12. ·3. The cash received on July 31 amounted to $4,017.15. It was left at the bank in the night de- pcsitory chute after banking hours on July 31 ar herefore was not recorded by the bank on the July statement. 4. Also included with the July bank statement was a debit memorandum from the bank for $7.65 representing service charges for July. 5. A credit memorandum enclosed with the July bank statement indicated that a non-interest- bearing note receivable for $4,545 from Rene Manes, left with the bank for collection, had been collected and the proceeds credited to the account of Norfleet Farm. 6. Comparison of the paid checks returned by the bank with the entries in the accounting records revealed that check no. 821 for $335.02, issued July 15 in payment for office equipment, had been erroneously entered in Norfleet's records as $853.02. 7. Examination of the paid checks also revealed that three checks, all issued in July, had not yet been paid by the bank: no. 811 for $861.12; no. 814 for $640.80; no. 823 for $301.05. 6. Included with the July bank statement was a $180 check drawn by Howard Williams, a cus- tomer of Norfleet Farm. This check was marked "NSF." It had been included in the deposit of LO 4 inst the company's account on July 31.
The cash transactions and cash balances of Norfleet Farm for July were as follows: PROBLEM 7.3 1. The ledger account for Cash showed a balance at July 31 of $16,766.95. Bank Reconciliation 2. The July bank statement showed a closing-balance of $18,928. 12. ·3. The cash received on July 31 amounted to $4,017.15. It was left at the bank in the night de- pcsitory chute after banking hours on July 31 ar herefore was not recorded by the bank on the July statement. 4. Also included with the July bank statement was a debit memorandum from the bank for $7.65 representing service charges for July. 5. A credit memorandum enclosed with the July bank statement indicated that a non-interest- bearing note receivable for $4,545 from Rene Manes, left with the bank for collection, had been collected and the proceeds credited to the account of Norfleet Farm. 6. Comparison of the paid checks returned by the bank with the entries in the accounting records revealed that check no. 821 for $335.02, issued July 15 in payment for office equipment, had been erroneously entered in Norfleet's records as $853.02. 7. Examination of the paid checks also revealed that three checks, all issued in July, had not yet been paid by the bank: no. 811 for $861.12; no. 814 for $640.80; no. 823 for $301.05. 6. Included with the July bank statement was a $180 check drawn by Howard Williams, a cus- tomer of Norfleet Farm. This check was marked "NSF." It had been included in the deposit of LO 4 inst the company's account on July 31.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Instructions
a. Prepare a bank reconciliation for Norfleet Farm at July 31.
b. Prepare journal entries (in general journai form) to adjust the accounts at July 31. Assume that
the accounts have not been closed.
c. State the amount of cash that should be included in the balance sheet at July 31.
d. Explain why the, balance per the company's bank statement is often larger than the balance
shown in its accounting records.
Transcribed Image Text:The cash transactions and cash balances of Norfleet Farm for July were as follows:
1. The ledger account for Cash showed a balance at July 31 of $16,766.95.
2. The July bank statement showed a closing.balance of S18,928. 12.
3. The cash received on July 31 amounted to $4,017.15. It was left at the bank in the night de-
pcsitory chute after banking hours on July 31 ar.
the July statement.
PROBLEM 7.3
Bank Reconciliation
LO 4
herefore was not recorded by the bank on
4. Also included with the July bank statement was a debit memorandum from the bank for $7.65
representing service charges for July.
5. A credit memorandum enclosed with the July bank statement indicated that a non-interest-
bearing note receivable for $4,545 from Rene Manes, left with the bank for collection, had
been collected and the proceeds credited to the account of Norfleet Farm.
6. Comparison of the paid checks returned by the bank with the entries in the accounting records
revealed that check no. 821 for $335.02, issued July 15 in payment for office equipment, had
been erroneously entered in Norfleet's records as $853.02.
7. Examination of the paid checks also revealed that three checks, all issued in July, had not yet
been paid by the bank: no. 811 for $861.12; no. 814 for $640.80; no. 823 for $301.05.
6. Included with the July bank statement was a $180 check drawn by Howard Williams, a cus-
tomer of Norfleet Farm. This check was marked "NSF." It had been included in the deposit of
Suly 27 but had been charged back against the company's account on July 31.
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