The information needed to prepare a bank reconciliation and the minted adjusting entries for Wicked Pony at March 31 is listed below. ‘ 1. Cash balance per the accounting records of Wicked Pony, $18,106.69. 2. The bank statement showed a balance of $22,134.22 at March 31. 3. Accompanying the bank statement was a debit memorandum relating to i check for $186 from a customer, D. Otay. The check was returned by the bank and stamped “NSF”. 4. Checks outstanding as of March 31 were as follows: no. 84 for $1,841.02; no 88 for $1,323.00; no. 89 for $16.26. 5. Also accompanying the bank statement was a debit memorandum for $44. 80 ' for safe deposit box rent; the bank had erroneously charged this item to the account of Wicked Pony. 6. On March 29, the bank collected a non-interest-bearing note for Wicked Pony. The note was for $2, 963; the bank charged a collection fee of $8. 40. 7. A deposit of $2, 008. 50 was in transit; it had been mailed to the bank on March ~31. 8. In recording a $160 check received on account from a customer, Ross Company, ' ' the accountant for Wicked Pony erroneously recorded the amount collected as $16. The check appeared correctly among the deposits on the March bank state meat. 9. The bank service charge for March amounted to $20. 40; a debit memo in this amount was returned with the bank statement. Instructions: a) Prepare a bank reconciliation at March 31. b) Prepare the necessary journal entries. c) What amount of cash should be included 1n the company’s March 31 balance sheet?

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 needed to prepare a bank reconciliation and the minted adjusting entries for

Wicked Pony at March 31 is listed below. ‘

1. Cash balance per the accounting records of Wicked Pony, $18,106.69.

2. The bank statement showed a balance of $22,134.22 at March 31.

3. Accompanying the bank statement was a debit memorandum relating to i check for $186

from a customer, D. Otay. The check was returned by the bank and stamped “NSF”.

4. Checks outstanding as of March 31 were as follows: no. 84 for $1,841.02; no 88 for

$1,323.00; no. 89 for $16.26.

5. Also accompanying the bank statement was a debit memorandum for $44. 80 ' for safe

deposit box rent; the bank had erroneously charged this item to the account of Wicked

Pony.

6. On March 29, the bank collected a non-interest-bearing note for Wicked Pony. The note

was for $2, 963; the bank charged a collection fee of $8. 40.

7. A deposit of $2, 008. 50 was in transit; it had been mailed to the bank on March ~31.

8. In recording a $160 check received on account from a customer, Ross Company, ' ' the

accountant for Wicked Pony erroneously recorded the amount collected as $16. The

check appeared correctly among the deposits on the March bank state meat.

9. The bank service charge for March amounted to $20. 40; a debit memo in this amount

was returned with the bank statement.

Instructions:

a) Prepare a bank reconciliation at March 31.

b) Prepare the necessary journal entries.

c) What amount of cash should be included 1n the company’s March 31 balance sheet?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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