The cash account of Indigo Co. showed a ledger balance of $7,088.13 on June 30,
ID: 2341169 • Letter: T
Question
The cash account of Indigo Co. showed a ledger balance of $7,088.13 on June 30, 2017. The bank statement as of that date showed a balance of $7,470.00. Upon comparing the statement with the cash records, the following facts were determined.
7. Check no. 742 in the amount of $491.00 had been entered in the cash journal as $419.00, and check no. 747 in the amount of $104.76 had been entered as $1,047.60. Both checks had been issued to pay for purchase of equipment and were payments on Indigo’s Accounts Payable.
Prepare a bank reconciliation dated June 30, 2017, proceeding to a correct cash balance.
1. There were bank service charges for June of $45.00. 2. A bank memo stated that Bao Dai’s note for $2,160.00 and interest of $64.80 had been collected on June 29, and the bank had made a charge of $9.90 on the collection. (No entry had been made on Indigo’s books when Bao Dai’s note was sent to the bank for collection.) 3. Receipts for June 30 for $6,102.00 were not deposited until July 2. 4. Checks outstanding on June 30 totaled $3,844.89. 5. The bank had charged the Indigo Co.’s account for a customer’s uncollectible check amounting to $455.76 on June 29. 6. A customer’s check for $162.00 (as payment on the customer’s Accounts Receivable) had been entered as $108.00 in the cash receipts journal by Indigo on June 15.7. Check no. 742 in the amount of $491.00 had been entered in the cash journal as $419.00, and check no. 747 in the amount of $104.76 had been entered as $1,047.60. Both checks had been issued to pay for purchase of equipment and were payments on Indigo’s Accounts Payable.
Prepare a bank reconciliation dated June 30, 2017, proceeding to a correct cash balance.
:Explanation / Answer
Bank reconciliation Bank balance 7470 Add Deposit in transit 6102 13572 Less Outstanding checks 3844.89 Adjusted bank balance 9727.11 Cash balance 7088.13 Add Notes receivable 2160 Interest on notes 64.8 Check no. 747 error (1047.60-104.76) 942.84 Error in recording (162-108) 54 3221.64 Less Service charges 45 Charges on notes 9.9 Check no. 742 error (491-419) 72 Bounced check 455.76 582.66 Adjusted cash balance 9727.11
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