The following information is available to reconcile Branch Company\'s book balan

Question

The following information is available to reconcile Branch Company's book balance of cash with it statement cash balance as of July 31, 2017. its b ank a. On July 31, the company's Cash account has a $27,497 debit balance, but its July bank st shows a $27,233 cash balance b. Check No. 3031 for $1,482 and Check No. 3040 for $55 8 were outstanding on the June 30 bank onciliation. Check No. 3040 is listed with the July canceled checks, but Check No. 3031 is n Check No. 3065 for $382 and Check No. 3069 for $2,281, both written in July, are n canceled checks on the July 31 statement. not among the c. In comparing the canceled checks on the bank statement with the entries in the accounting rec ords, it is found that Check No. 3056 for July rent expense was correctly written and drawn for $1,270 but w erroneously entered in the accounting records as $1,250 d. The July bank stat ement shows the bank collected $8,000 cash on a noninterest-bearing note for Branch, deducted a $45 collection expense, and credited the remainder to its account. Branch ha recorded this event before receiving the statement. e. The bank statement shows an $805 charge for a $795 NSF check plus a $10 NSF charge. The check f. The July statement shows a $25 bank service charge. It has not yet been recorded in miscellaneous g. Branch's July 31 daily cash receipts of $11,514 were placed in the bank's night depository on that date had been received from a customer, Evan Shaw. Branch has not yet recorded this check as NSP expenses because no previous notification had been received but do not appear on the July 31 bank statement Required 1. Prepare the bank reconciliation for this company as of July 31, 2017 2. Prepare the journal entries necessary to bring the company's book balance of cash into conformity with the reconciled cash balance as of July 31, 2017 Analysis Component 3. Assume that the July 31, 2017, bank reconciliation for this company is prepared and some items are treated incorrectly. For each of the following errors, explain the effect of the error on (i) the adjusted bank statement cash balance and (ii) the adjusted Cash account book balance a. The company's unadjusted Cash account balance of $27,497 is listed on the reconciliation as $27.947 b. The bank's collection of the $8,000 note less the $45 collection fee is added to the bank statement cash balance on the reconciliation

Explanation / Answer

1.

2.

3.

a. Adjusted bank statment cash balance will be $450 more than the actual balance.

b. Adjusted cash account cash balance will be $450 less than the balce in the reconciliation statement.

BRANCH COMPANY Bank Reconciliation Statement for the month of July 31, 2017 Details Amount Details Amount Balance as per bank 27233 Balance as per cash book 27497 Add: Add: Collection charges 45 Check# 3031 not cancelled 1482 Wrong entry for check #3056 20 Check# 3065 not cancelled 382 NSF check 795 Check# 3069 not cancelled 2281 NSF charge 10 Bank service charge 25 Note receivable collected 8000 Cash in transit 11514 Total Additions 12409 Total Additions 12145 Less: Less: Check# 3031 not cancelled 1482 Collection charges 45 Check# 3065 not cancelled 382 Wrong entry for check #3056 20 Check# 3069 not cancelled 2281 NSF check 795 NSF charge 10 Note receivable collected 8000 Bank service charge 25 Cash in transit 11514 Total Deductions 12145 Total Deductions 12409 Balance as per cash book 27497 Balance as per bank 27233

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