Ace Lawn Care Module 4 Mini Practice Problem In June, Jim commented to you that

Question

Ace Lawn Care Module 4 Mini Practice Problem In June, Jim commented to you that he could never figure out his bank statement, "it never matches the balance in my accounting records" he tells you. So you explain that a bank reconciliation is a tool used to balance the bank statement to the accounting books. He gives you his bank statement for June, 2014 (shown below). The general ledger shows a balance for the account cash of S$19,319.00 on June 30, 2014 (detail transactions below). Jim's business only has one checking account and no other cash accounts. 1. Using the bank statement and the general ledger, prepare a bank reconciliation for Ace Lawn Care as of June 30, 2014. Record the necessary journal entries to adjust the books for the appropriate reconciling items. Start with Page 6 for the journal entries. Explanations are optional. CHECKING ACCOUNT DETAIL: $17,85000 HALANC 6204 CHCK 1570 632014 C..ECK #1571 662014 22600 1724.0 300 1741.0 18,819.00 18500 1634.00 8500 1519.0 6152014 CHECK $157 2014 DEPOSIT105 24 2014 EFT4 DEROSIT 106 302014 CHECK 1576 302014 CHECK 1577 8700 19 289.00 9500 1194.0 00 19619.00 15500 1946400 4500 51319.00 BANK STATEMENT FIRST NATIONAL BANK $102100 244000 50 FEES ENDING SALANCE REFERENCEAMOUNT 52600 014 90014 570 27.0 4500 572 1575 REFERENCE AMOUNT 611 2014 6232014 FEES 630-2014 SvC CIK 35.00 Additional Information: Check #1570 was writtenfor S26600, but was recorded incorrectly in the general ledger The check was for fuel.

Explanation / Answer

Bank reconciliation Ending balance as per bank statement 19234 Add Deposit in transit 425 425 Less Outstanding checks 387 Adjusted bank balance 19272 Ending balance as per cash account 19319 Add Directly collected by Bank EFT 143 Interest revenue 5 148 Less Service charges 35 NSF 120 Error in check #1570 40 195 Adjusted cash balance 19272 Service charges 35 Accounts payable (120+40) 160                      Cash 195 Cash 148            Interest revenue 5            Accounts receivable 143

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