The information below relates to the Cash account in the ledger of Lily Company.Balance September 1—$17,260; Cash deposited—$64,040.Balance September 30—$18,104; Checks written—$63,196.The September bank statement shows a balance of $17,122 on September 30 and the following memoranda.Credits DebitsCollection of $1,841 note plus interest $39 $1,880 NSF check: Richard Nance $775Interest earned on checking account $54 Safety deposit box rent $74At September 30, deposits in transit were $4,800, and outstanding checks totaled $2,733. 1. Prepare the bank reconciliation at September 30. (List items that increase cash balance first.) 2. Prepare the adjusting entries at September 30, assuming (1) the NSF check was from a customer on account, and (2) no interest had been accrued on the note. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

The financial transactions are initially recorded in the form of journal entry.

Answered: The information below relates to the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The information below relates to the Cash account in the ledger of Lily Company.

Balance September 1—$17,260;		Cash deposited—$64,040.
Balance September 30—$18,104;		Checks written—$63,196.

The September bank statement shows a balance of $17,122 on September 30 and the following memoranda.

Credits	Debits
Collection of $1,841 note plus interest $39	$1,880	NSF check: Richard Nance	$775
Interest earned on checking account	$54	Safety deposit box rent	$74

At September 30, deposits in transit were $4,800, and outstanding checks totaled $2,733.

1. Prepare the bank reconciliation at September 30. (List items that increase cash balance first.)

2. Prepare the adjusting entries at September 30, assuming (1) the NSF check was from a customer on account, and (2) no interest had been accrued on the note. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

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