Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
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Question
Chapter 4, Problem 55PB
1.
To determine
Compute the bank reconciliation as on June 30.
2.
To determine
Prepare the
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On June 30, 2018, Roddick Company had a cash
balance in its general ledger of $11,595. The company's bank statement froui Bank One showed
a June 30 balance of $12,540. The following facts have come to your attention:
a. Roddick's June 30 deposit of $2,500 was not included on the bank statement because it
was dropped in the night depository after bank hours on June 30.
b. The bank's general service charge for the month was $40.
c. The bank collected a note receivable of $2,000 for Roddick Company along with an
additional $58 for interest. The bank deducted a $10 fee for this service. Roddick
Company had not accrued any interest on the note.
d. Roddick's bookkeeper erroneously recorded a payment to Federer Company for $892
as $829. The check cleared the bank for the correct amount of $892. R
e. Roddick's outstanding checks at June 30 totaled $1,500.
Reptis .
Msint Exp.
Requirements
1. Prepare a bank reconciliation as of June 30.
2. Prepare the necessary adjustment to update the records…
The Cash account of Reese Corporation had a balance of $3,540 at October 31, 2018. Included were outstanding checks
totaling $1,800 and an October 31 deposit of $300 that did not appear on the bank statement. The bank statement, which came
from Turnstone State Bank, listed an October 31 balance of $5,570. Included in the bank balance was an October 30 collection
of $600 on account from a customer who pays the bank directly. The bank statement also showed a $30 service charge, $10 of
interest revenue that Reese earned on its bank balance, and an NSF check for $50.
Read the requirement.
Prepare a bank reconciliation to determine how much cash Reese actually had at October 31. (Indlude the balances at October
31 in each of the addition subtotal calculations.)
Reese Corp.
Bank Reconcillation
October 31, 2018
Bank
Books
Balance, October 31
Balance, October 31
Add:
Add:
Subtotal
Subtotal
Less:
Less:
Adjusted bank balance
Adjusted book balance
Reese has cash of
at October 31.
The Cash account of
Reese
Corporation had a balance of
$3,540
at
October
31,
2018.
Included were outstanding checks totaling
$1,800
and an
October
31
deposit of
$300
that did not appear on the bank statement. The bank statement, which came from
Turnstone
State Bank, listed an
October
31
balance of
$5,570.
Included in the bank balance was an
October
30 collection of
$600
on account from a customer who pays the bank directly. The bank statement also showed a
$30
service charge,
$10
of interest revenue that
Reese
earned on its bank balance, and an NSF check for
$50.
Reese
Corporation's bank reconciliation follows.
Reese Corp.
Bank Reconciliation
October 31, 2018
Bank
Books
Balance, October 31
$5,570
Balance, October 31
$3,540
Add:
Add:
Deposit in transit
300
Bank collection
600
5,870
Interest revenue
10…
Chapter 4 Solutions
Financial Accounting
Ch. 4 - Prob. 1YTCh. 4 - Prob. 2YTCh. 4 - Suppose at the end of the year Pendleton Corp.s...Ch. 4 - Prob. 4YTCh. 4 - Prob. 5YTCh. 4 - Prob. 6YTCh. 4 - Prob. 7YTCh. 4 - Prob. 1QCh. 4 - Prob. 2QCh. 4 - Prob. 3Q
Ch. 4 - Prob. 4QCh. 4 - What does true cash balance refer to?Ch. 4 - Identify and explain the financial statements on...Ch. 4 - Describe how accounts receivable arise. What does...Ch. 4 - Prob. 8QCh. 4 - Define net realizable value, book value, and...Ch. 4 - Explain the difference between the direct...Ch. 4 - If a company uses the allowance method of...Ch. 4 - Describe the two allowance methods used to...Ch. 4 - Which method of calculating the allowance for...Ch. 4 - Which method of calculating the allowance for...Ch. 4 - What are the advantages and disadvantages of...Ch. 4 - What is the difference between accounts receivable...Ch. 4 - What is the formula to calculate the accounts...Ch. 4 - How does a firm use its accounts receivable...Ch. 4 - Prob. 19QCh. 4 - Prob. 20QCh. 4 - Prob. 1MCQCh. 4 - Prob. 2MCQCh. 4 - Prob. 3MCQCh. 4 - Prob. 4MCQCh. 4 - Prob. 5MCQCh. 4 - Prob. 6MCQCh. 4 - Prob. 7MCQCh. 4 - Prob. 8MCQCh. 4 - Prob. 9MCQCh. 4 - Prob. 1SEACh. 4 - Prob. 2SEACh. 4 - Prob. 3SEACh. 4 - Prob. 4SEACh. 4 - Prob. 5SEACh. 4 - Prob. 6SEACh. 4 - Prob. 7SEACh. 4 - Prob. 8SEACh. 4 - Prob. 9SEACh. 4 - Prob. 10SEBCh. 4 - Prob. 11SEBCh. 4 - Prob. 12SEBCh. 4 - Prob. 13SEBCh. 4 - Prob. 14SEBCh. 4 - Prob. 15SEBCh. 4 - Prob. 16SEBCh. 4 - Prob. 17SEBCh. 4 - Prob. 18SEBCh. 4 - Prob. 19EACh. 4 - Prob. 20EACh. 4 - Prob. 21EACh. 4 - Prob. 22EACh. 4 - Prob. 23EACh. 4 - Prob. 24EACh. 4 - Prob. 25EACh. 4 - Prob. 26EACh. 4 - Prob. 27EACh. 4 - Prob. 28EACh. 4 - Prob. 29EACh. 4 - Prob. 30EACh. 4 - Prob. 31EACh. 4 - Prob. 32EBCh. 4 - Prob. 33EBCh. 4 - Prob. 34EBCh. 4 - Prob. 35EBCh. 4 - Prob. 36EBCh. 4 - Prob. 37EBCh. 4 - Prob. 38EBCh. 4 - Prob. 39EBCh. 4 - Prob. 40EBCh. 4 - Prob. 41EBCh. 4 - Prob. 42EBCh. 4 - Prob. 43EBCh. 4 - Prob. 44EBCh. 4 - Prob. 45PACh. 4 - Prob. 46PACh. 4 - Prob. 47PACh. 4 - Prob. 48PACh. 4 - Prob. 49PACh. 4 - Prob. 50PACh. 4 - Prob. 51PACh. 4 - Prob. 52PACh. 4 - Prob. 53PBCh. 4 - Prob. 54PBCh. 4 - Prob. 55PBCh. 4 - Prob. 56PBCh. 4 - Prob. 57PBCh. 4 - Prob. 58PBCh. 4 - Prob. 59PBCh. 4 - Prob. 60PBCh. 4 - Prob. 1FSACh. 4 - Prob. 2FSACh. 4 - The following information has been adapted from...Ch. 4 - Prob. 1CTPCh. 4 - Prob. 2CTPCh. 4 - The information given here was taken from Yahoo!...Ch. 4 - Prob. 1IECh. 4 - Prob. 2IECh. 4 - The information given here was taken from Yahoo!...
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- The bank reconciliation revealed that one deposit had cleared the bank two weeks after the date of the deposit. Should this be of concern? Why, or why not?arrow_forwardUsing the following information, prepare a bank reconciliation. Bank balance: $12,565. Book balance: $13,744. Deposits in transit: $2,509. Outstanding checks: $1,777. Bank charges: $125. Bank incorrectly charged the account for $412. The bank will correct the error next month. Check number 1879 correctly cleared the bank in the amount of $562 but posted in the accounting records as $652. This check was expensed to Utilities Expense.arrow_forwardOscar Myer receives the March bank statement for Jam Enterprises on April 11, 2018. The March 31 bank statement shows an ending cash balance of $67,566. A comparison of the bank statement with the general ledger Cash account, No. 101, reveals the following. O. Myer notices that the bank erroneously cleared a $500 check against his account in March that he did not issue. The check documentation included with the bank statement shows that this check was actually issued by a company named Jam Systems. On March 25, the bank lists a $50 charge for the safety deposit box expense that Jam Enterprises agreed to rent from the bank beginning March 25. On March 26, the bank lists a $102 charge for printed checks that Jam Enterprises ordered from the bank. On March 31, the bank lists $33 interest earned on Jam Enterprises' checking account for the month of March. O. Myer notices that the check he issued for $128 on March 31, 2018, has not yet cleared the bank. O. Myer verifies that all deposits…arrow_forward
- Oscar Myer receives the March bank statement for Jam Enterprises on April 11, 2018. The March 31 bank statement shows an ending cash balance of $67,566. A comparison of the bank statement with the general ledger Cash account, No. 101, reveals the following. O. Myer notices that the bank erroneously cleared a $500 check against his account in March that he did not issue. The check documentation included with the bank statement shows that this check was actually issued by a company named Jam Systems. On March 25, the bank lists a $50 charge for the safety deposit box expense that Jam Enterprises agreed to rent from the bank beginning March 25. On March 26, the bank lists a $102 charge for printed checks that Jam Enterprises ordered from the bank. On March 31, the bank lists $33 interest earned on Jam Enterprises' checking account for the month of March. O. Myer notices that the check he issued for $128 on March 31, 2018, has not yet cleared the bank. O. Myer verifies that all deposits…arrow_forwardOscar Myer receives the March bank statement for Jam Enterprises on April 11, 2018. The March 31 bank statement shows an ending cash balance of $67,566. A comparison of the bank statement with the general ledger Cash account, No. 101, reveals the following. O. Myer notices that the bank erroneously cleared a $500 check against his account in March that he did not issue. The check documentation included with the bank statement shows that this check was actually issued by a company named Jam Systems. On March 25, the bank lists a $50 charge for the safety deposit box expense that Jam Enterprises agreed to rent from the bank beginning March 25. On March 26, the bank lists a $102 charge for printed checks that Jam Enterprises ordered from the bank. On March 31, the bank lists $33 interest earned on Jam Enterprises' checking account for the month of March. O. Myer notices that the check he issued for $128 on March 31, 2018, has not yet cleared the bank. O. Myer verifies that all deposits…arrow_forwardOscar Myer receives the March bank statement for Jam Enterprises on April 11, 2018. The March 31 bank statement shows an ending cash balance of $67,566. A comparison of the bank statement with the general ledger Cash account, No. 101, reveals the following. O. Myer notices that the bank erroneously cleared a $500 check against his account in March that he did not issue. The check documentation included with the bank statement shows that this check was actually issued by a company named Jam Systems. On March 25, the bank lists a $50 charge for the safety deposit box expense that Jam Enterprises agreed to rent from the bank beginning March 25. On March 26, the bank lists a $102 charge for printed checks that Jam Enterprises ordered from the bank. On March 31, the bank lists $33 interest earned on Jam Enterprises' checking account for the month of March. O. Myer notices that the check he issued for $128 on March 31, 2018, has not yet cleared the bank. O. Myer verifies that all deposits…arrow_forward
- The cash account for Kahn Inc. on November 30, 2018, indicated a balance of $5,699. The bank statement indicated a balance of $13,167 on November 30, 2018. The following reconciling items were discovered.Checks outstanding totaled $5,175. A deposit of $3,842, representing cash receipts of November 30, had been made too late to appear on the bank statement. The bank had collected for Kahn $4,800 on a note left for collection. The face of the note was $4,200. Kahn had recorded a check for $2,040 as a $2,400. The check was for the payment of a 3-year insurance policy. A check for $1,176 had been incorrectly charged by the bank as $176. Bank service charges for November amounted to $25. Required: Prepare the bank reconciliation and journalize the necessary entries.arrow_forwardAdversary Company kept all cash in a checking account. An examination of the accounting records and bank statement for the month of June revealed the following information: The cash balance per book on June 30 is P8,500,000. • A deposit of P1,000,000 that was placed in the bank's night depository on June 30 does not appear on the bank statement. • The bank statement shows on June 30, the bank collected note for adversary Company and credited the proceeds of P950,000 to the entity's account. • Checks outstanding on June 30 amount to P300,000. Adversary Company discovered that a check written in June for P200,000 in payment of an account payable had been recorded in the entity's records as P20,000. Include with the June bank statement was NSF check for 250,000 that adversary Company had received from a customer on June 26. The bank statement shows a P20,000 service charge for June. What is the net adjustment to cash in bank on June 30? A.Net debit P950,000 B.Net credit P450,000 C.Net…arrow_forwardAdversary Company kept all cash in a checking account. An examination of the accounting records and bank statement for the month of June revealed the following information: The cash balance per book on June 30 is P8,500,000. A deposit of P1,000,000 that was placed in the bank's night depository on June 30 does not appear on the bank statement. • The bank statement shows on June 30, the bank collected note for adversary Company and credited the proceeds of P950,000 to the entity's account. Checks outstanding on June 30 amount to P300,000. Adversary Company discovered that a check written in June for P200,000 in payment of an account payable had been recorded in the entity's records as P20,000. Include with the June bank statement was NSF check for 250,000 that adversary Company had received from a customer on June 26. The bank statement shows a P20,000 service charge for June. What amount should be reported as cash in bank on June 30?arrow_forward
- Nolan Company's cash account shows a $26,426 debit balance and its bank statement shows $25,694 on deposit at the close of business on June 30. a. Outstanding checks as of June 30 total $2,907. b. The June 30 bank statement lists $32 in bank service charges; the company has not yet recorded the cost of these services. c. In reviewing the bank statement, a $80 check written by the company was mistakenly recorded in the company's books as $89. d. June 30 cash receipts of $3,656 were placed in the bank's night depository after banking hours and were not recorded on the June 30 bank statement. e. The bank statement included a $40 credit for interest earned on the company's cash in the bank. The company has not yet recorded interest earned. Prepare a bank reconciliation using the above information. Bank statement balance Add: Deduct: Adjusted bank balance NOLAN COMPANY Bank Reconciliation June 30 Book balance Add: Deduct: Adjusted book balancearrow_forwardPlease see imagearrow_forward1) On May 31, Money Corporation's Cash account showed a balance of $17,000 before the bank reconciliation was prepared. After examining the May bank statement and items included with it, the company's accountant found the following items : 1,950 Checks outstanding Deposits outstanding NSF check from a customer 3,700 170 Service fees 105 Error: Money Corporation wrote a check for $70 but recorded it incorrectly for $700. What is the amount of cash that should be reported in the company's balance sheet as of May 31?arrow_forward
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