FINANCIAL ACCOUNTING
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Transcribed Image Text:**Requirements**
1. Prepare the bank reconciliation of Davidson Insurance at December 31, 2018.
2. Journalize any required entries from the bank reconciliation.
**P7-28A Preparing a bank reconciliation and journal entries**
The August 31 bank statement of Well Healthcare has just arrived from United Bank. To prepare the bank reconciliation, you gather the following data:
a. The August 31 bank balance is $4,540.
b. The bank statement includes two charges for NSF checks from customers. One is for $380 (#1), and the other is for $180 (#2).
c. The following Well Healthcare checks are outstanding at August 31:
| Check No. | Amount |
|-----------|--------|
| 237 | $80 |
| 288 | $190 |
| 291 | $570 |
| 294 | $600 |
| 295 | $30 |
| 296 | $70 |
d. Well collects from a few customers by EFT. The August bank statement lists a $1,200 EFT deposit for a collection on account.
e. The bank statement includes two special deposits that Well hasn't recorded yet: $800 for dividend revenue, and $120 for the interest revenue Well earned on its bank balance during August.
f. The bank statement lists a $50 subtraction for the bank service charge.
g. On August 31, the Well treasurer deposited $260, but this deposit does not appear on the bank statement.
h. The bank statement includes a $1,050 deduction for a check drawn by Multi-State Freight Company. Well notified the bank of this bank error.
i. Well’s Cash account shows a balance of $2,800 on August 31.
**Requirements**
1. Prepare the bank reconciliation for Well Healthcare at August 31, 2018.
2. Journalize any required entries from the bank reconciliation. Include an explanation for each entry.
**Problems Group B**
**P7-29B Identifying internal control weakness in cash receipts**
Pendley Productions makes all sales on account...
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