P8-4A Prepare a bank reconciliation and adjusting entries from detailed data . (
ID: 2487879 • Letter: P
Question
P8-4A
Prepare a bank reconciliation and adjusting entries from detailed data.
(LO 3)
The bank portion of the bank reconciliation for Langer Company at November 30, 2017, was as follows.
LANGER COMPANY
Bank Reconciliation
November 30, 2017
The adjusted cash balance per bank agreed with the cash balance per books at November 30.
The December bank statement showed the following checks and deposits.
The cash records per books for December showed the following.
The bank statement contained two memoranda:
1.A credit of $5,145 for the collection of a $5,000 note for Langer Company plus interest of $160 and less a collection fee of $15. Langer Company has not accrued any interest on the note.
2.A debit of $572.80 for an NSF check written by L. Rees, a customer. At December 31, the check had not been redeposited in the bank.
At December 31, the cash balance per books was $12,485.20, and the cash balance per the bank statement was $20,154.30. The bank did not make any errors, but two errors were made by Langer Company.
Instructions
(a)
Using the four steps in the reconciliation procedure, prepare a bank reconciliation at December 31.
Adjusted balance per books $16,958.40
(b)
Prepare the adjusting entries based on the reconciliation.
(Hint: The correction of any errors pertaining to recording checks should be made to Accounts Payable. The correction of any errors relating to recording cash receipts should be made to Accounts Receivable.)
LANGER COMPANY
Bank Reconciliation
November 30, 2017
Cash balance per bank $14,367.90 Add: Deposits in transit 2,530.20 16,898.10 Less: Outstanding checks Check Number Check Amount 3451 $2,260.40 3470 720.10 3471 844.50 3472 1,426.80 3474 1,050.00 6,301.80 Adjusted cash balance per bank $10,596.30Explanation / Answer
Part A)
The bank reconciliation is as follows:
________
Part B)
The adjusting entries are as follows:
Langer Company Bank Reconciliation December 31, 2017 Cash balance per bank statement 20,154.30 Add Deposit in Transit 1,690.40 21,844.70 Less Outstanding Checks No. 3470 720.10 No. 3474 1,050.00 No. 3478 621.30 No. 3481 807.40 No. 3484 798.00 No. 3486 889.50 4,886.30 Adjusted cash balance per bank $16,958.40 Cash balance per books 12,485.20 Add Note Collected by Bank (5,000 + 160 – 15) 5,145.00 17,630.20 Less NSF check 572.80 Error in recording check No. 3485 (540.80 – 450.80) 90.00 Error in 12-21 deposit (2,954 – 2,945) 9.00 671.80 Adjusted cash balance per books $16,958.40Related Questions
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