BANK STATEMENT Date Checks and EFTs Deposits Balance Aug. 1 17,510 2 320 17,190
ID: 2424307 • Letter: B
Question
BANK STATEMENT Date Checks and EFTs Deposits Balance Aug. 1 17,510 2 320 17,190 3 11,700 28,890 4 430 28,460 5 270 28,190 9 880 27,310 10 250 ETF 27,060 15 4,000 31,060 21 350 30,710 24 20,400 10,310 25 6,500 16,810 30 850 ETF 15,960 30 2,350 * 18,310 31 120 † 18,190 *$2,350 interest collected. † service charge. Cash (A) Aug. 1 Balance 16,490 Checks & ETF Deposits 250 ETF Aug. 2 Aug. 2 11,700 880 CK 4 12 4,000 280 CK 15 24 6,500 510 CK 17 31 5,200 850 ETF 18 350 CK 20 20,400 CK 23 Outstanding checks at the end of July were for $270, $430, and $320. No deposits were in transit at the end of July. Required: 1. Compute the deposits in transit at the end of August by comparing the deposits on the bank statement to the deposits listed on the cash ledger account. 2. Compute the outstanding checks at the end of August by comparing the checks listed on the bank statement with those on the cash ledger account and the list of outstanding checks at the end of July. 3. Prepare a bank reconciliation for August (Reconcile Book balance to Correct balance and Bank balance to Correct balance). 4. Give any journal entries that the company should make as a result of the bank reconciliation. Why are they necessary? 5. What total amount of cash should be reported on the August 31, 2014, balance sheet? BANK STATEMENT Date Checks and EFTs Deposits Balance Aug. 1 17,510 2 320 17,190 3 11,700 28,890 4 430 28,460 5 270 28,190 9 880 27,310 10 250 ETF 27,060 15 4,000 31,060 21 350 30,710 24 20,400 10,310 25 6,500 16,810 30 850 ETF 15,960 30 2,350 * 18,310 31 120 † 18,190 *$2,350 interest collected. † service charge. Cash (A) Aug. 1 Balance 16,490 Checks & ETF Deposits 250 ETF Aug. 2 Aug. 2 11,700 880 CK 4 12 4,000 280 CK 15 24 6,500 510 CK 17 31 5,200 850 ETF 18 350 CK 20 20,400 CK 23 Outstanding checks at the end of July were for $270, $430, and $320. No deposits were in transit at the end of July. Required: 1. Compute the deposits in transit at the end of August by comparing the deposits on the bank statement to the deposits listed on the cash ledger account. 2. Compute the outstanding checks at the end of August by comparing the checks listed on the bank statement with those on the cash ledger account and the list of outstanding checks at the end of July. 3. Prepare a bank reconciliation for August (Reconcile Book balance to Correct balance and Bank balance to Correct balance). 4. Give any journal entries that the company should make as a result of the bank reconciliation. Why are they necessary? 5. What total amount of cash should be reported on the August 31, 2014, balance sheet?Explanation / Answer
1- Deposit in Transit= $5200.
Deposit shown in Cash ledger on 31st Aug, is not Credit in Bank upto end of Aug.
2- Chk issue on 12 and 24 Aug. not Presented hence total CHK In transit is= 280+510= $790
3- Bank Reconcilation Statement-
4- Journal Entry-
5-
Balance as per Bank on 31 Aug, $18,190.00 CHK Not presented -$790.00 Deposit in transit $5,200.00 Interest Credited by Bank -$2,350.00 Service charge $120.00 Balance as Cash Ledger on 31 Aug, $20,370.00Related Questions
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