Natalie decides that she cannot afford to hire John to do her accounting. One wa
ID: 2467366 • Letter: N
Question
Natalie decides that she cannot afford to hire John to do her accounting. One way that she can ensure that her cash account does not have any errors and is accurate and up-to-date is to prepare a bank reconciliation at the end of each month.
Natalie would like you to help her. She asks you to prepare a bank reconciliation for June 2016 using the following information.
GENERAL LEDGER—COOKIE CREATIONS
Cash
Date
Explanation
Ref
Debit
Credit
Balance
2016
June 1
Balance
2,657
1
750
3,407
3
Check #600
625
2,782
3
Check #601
95
2,687
8
Check #602
56
2,631
9
1,050
3,681
13
Check #603
425
3,256
20
155
3,411
28
Check #604
297
3,114
28
110
3,224
Additional information:
The NSF fee will be charged to the customer.
Prepare any necessary adjusting entries at June 30. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
June 30
June 30
June 30
June 30
If a balance sheet is prepared for Cookie Creations at June 30, what balance will be reported as cash in the current assets section?
GENERAL LEDGER—COOKIE CREATIONS
Cash
Date
Explanation
Ref
Debit
Credit
Balance
2016
June 1
Balance
2,657
1
750
3,407
3
Check #600
625
2,782
3
Check #601
95
2,687
8
Check #602
56
2,631
9
1,050
3,681
13
Check #603
425
3,256
20
155
3,411
28
Check #604
297
3,114
28
110
3,224
Explanation / Answer
Answer a. Journal Entry Date Particulars Dr. Amt Cr. Amt. Jun-30 Bank Charges Dr. 13 To Cash 13 (To record Bank Charges) Jun-30 Cash Dr. 30 To Account Receivables (155-125) 30 (To record the error in deposits made on June-20) Jun-30 Utilities Exp. Dr. 85 To Cash 85 (To record EFT charges) Jun-30 Accounts Receivables Dr. 135 To Cash 135 (To record the NSF check and Bank charges) Answer b. Cash at June -30 (To be shown in Balance Sheet) 2,961 Bank reconcilation Statement Cash Balance According to bank statement 3,359 Outstanding Checks Check#595 -238 Check#604 -297 (535) Deposit in Transit - Deposit on June 28 110 Bank Error - Check#603 (452-425) 27 Bank Balance after Reconcilation 2,961 Cash balance accordibg to Company's record 3,224 Error in Deposit made on June 20 (125-155) (30) EFT - Telus - Utility Bill Directly paid by Bank (85) NSF Check return (100) NSF - Fee (35) Bank Charges (13) Company Balance per Reconcilation 2,961
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