The Cash account in the general ledger of Hendry Corporation shows a balance of $96,990 at 31 December 2018 (prior to performing a bank reconciliation). The company's bank statement show a balance of $100,560 at the same date. An examination of the bank statement reveals the following: 1. Deposit in transit amount of $24,600. 2. Bank service charges total $200. 3. Outstanding checks total $31,700. 4. A $3,600 check marked “NSF" from Kent Company (one of the customers) was returned to Hendry Corporation by the bank. This was the only NSF check that Hendry Corporation received during 2018. 5. A cleared check (no.244) written by Hendry Corporation in the amount of $1,250 for the office equipment was incorrectly recorded in the general ledger as a debit to Office Equipment of $1520 and a credit to Cash of $1,520. On 1 December 2018, Hendry Corporation purchase a warehouse from Moran Industries for $100,000. Hendry issued a six-month, $100,000, 6% (p.a.) note payable to Moran. The note, plus accrued interest is due in full on 31 May 2019. Hendry Corporation adjusts for accrued interest revenue monthly. Instructions a) Prepare the bank reconciliation dated 31 December 2018 and provide the journal entry necessary to update the company's general ledger balances. b) Prepare the adjusting entry necessary to account for the note payable at 31 December 2018.
The Cash account in the general ledger of Hendry Corporation shows a balance of $96,990 at 31 December 2018 (prior to performing a bank reconciliation). The company's bank statement show a balance of $100,560 at the same date. An examination of the bank statement reveals the following: 1. Deposit in transit amount of $24,600. 2. Bank service charges total $200. 3. Outstanding checks total $31,700. 4. A $3,600 check marked “NSF" from Kent Company (one of the customers) was returned to Hendry Corporation by the bank. This was the only NSF check that Hendry Corporation received during 2018. 5. A cleared check (no.244) written by Hendry Corporation in the amount of $1,250 for the office equipment was incorrectly recorded in the general ledger as a debit to Office Equipment of $1520 and a credit to Cash of $1,520. On 1 December 2018, Hendry Corporation purchase a warehouse from Moran Industries for $100,000. Hendry issued a six-month, $100,000, 6% (p.a.) note payable to Moran. The note, plus accrued interest is due in full on 31 May 2019. Hendry Corporation adjusts for accrued interest revenue monthly. Instructions a) Prepare the bank reconciliation dated 31 December 2018 and provide the journal entry necessary to update the company's general ledger balances. b) Prepare the adjusting entry necessary to account for the note payable at 31 December 2018.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter4: Internal Control And Cash
Section: Chapter Questions
Problem 16CE
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