*Problem 7-13 The cash account of Wildhorse Co. showed a ledger balance of $13,3
ID: 2591034 • Letter: #
Question
*Problem 7-13 The cash account of Wildhorse Co. showed a ledger balance of $13,324.69 on June 30, 2017. The bank statement as of that date showed a balance of $14,110.00. Upon comparing the statement with the cash records, the following facts were determined There were bank service charges for June of $85.00 A bank memo stated that Bao Dai's note for $4,080.00 and interest of $122.40 had been collected on June 29, and the bank had made a charge of $18.70 on the collection. (No entry had been made on Wildhorse's books when Bao Dai's note was sent to the bank for collection.) 1. 2. 3. Receipts for June 30 for $11,526.00 were not deposited until July 2 4. Checks outstanding on June 30 totaled $7,262.57 5. The bank had charged the Wildhorse Co.s account for a customer's uncollectible check amounting to $860.88 on June 29 . A customer's check for $306.00 (as payment on the customer's Accounts Receivable) had been entered as $204.00 in the cash receipts journal by Wildhorse on June 15 Check no. 742 in the amount of $491.00 had been entered in the cash journal as $419.00, and check no. 747 in the amount of $197.88 had been entered as $1,978.80. Both checks had been issued to pay for purchase of equipment and were payments on Wildhorse's Accounts Payable 7. Prepare a bank reconciliation dated June 30, 2017, proceeding to a correct cash balance. (Enter answers to 2 decimal places, e.g. 125.62.) WILDHORSE CO. Bank Reconciliation June 30, 2017 Add: Less Prepare entries necessary to make the books correct and complete. Use Office Expense account for bank service charges. (Enter answers to 2 decimal places, e.g 125.62. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)Explanation / Answer
Wildhorse Co
Bank Reconciliation Statement
Wildhorse Co
Bank Reconciliation Statement
30-Jun-17
Balance as per bank statement
$14,110
Add: deposits in transit
$11,526
$25,636
Less: Outstanding checks
($7,262.57)
Adjusted bank balance
$18,373.43
Cash balance as per books
$13,324.69
Add:Direct collections by bank
$4,183.70
Error in recording accounts receivable
$102
Error in recording check number 747
$1,780.92
$6,066.62
$19,391.31
Less:
bank service charges
($85)
error in recording check number 742
($72)
uncollectible check
($860.88)
($1,017.88)
Adjusted cash balance in books
$18,373.43
Journal Entries:
Date
Account Titles and Explanation
Debit
Credit
30-Jun-17
Cash
$6,085.32
Equipment
$1,780.92
Notes Receivable
$4,080
Interest Earned
$122.40
Accounts Receivable
$102
(To record increase in cash)
30-Jun-17
Bank Charges
$85
Collection Fee
$18.70
Accounts Receivable
$860.88
Equipment
$72
Cash
$1,036.58
(To record decrease in cash)
Working:
Adjusting entries:
Date
Account Titles and Explanation
Debit
Credit
30-Jun-17
Cash
$4,183.70
Collection Fee
$18.70
Notes Receivable
$4,080
Interest Revenue
$122.40
(To record notes collected by bank, interest earned and bank charges)
30-Jun-17
Bank Charges
$85
Cash
$85
(To record bank service charges for June)
30-Jun-17
Accounts Receivable
$860.88
Cash
$860.88
(To record uncollectible check)
30-Jun-17
Cash
$102
Accounts Receivable
$102
(To record error in recording receipts from customer)
30-Jun-17
Cash
$1,780.92
Equipment
$1,780.92
(To record error in recording check no. 747)
30-Jun-17
Equipment
$72
Cash
$72
(To record error in recording check no. 742)
Wildhorse Co
Bank Reconciliation Statement
30-Jun-17
Balance as per bank statement
$14,110
Add: deposits in transit
$11,526
$25,636
Less: Outstanding checks
($7,262.57)
Adjusted bank balance
$18,373.43
Cash balance as per books
$13,324.69
Add:Direct collections by bank
$4,183.70
Error in recording accounts receivable
$102
Error in recording check number 747
$1,780.92
$6,066.62
$19,391.31
Less:
bank service charges
($85)
error in recording check number 742
($72)
uncollectible check
($860.88)
($1,017.88)
Adjusted cash balance in books
$18,373.43
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