Entries for Bank ReconciliationThe following data were accumulated for use in reconciling the bank account of Wolfpack Bread Inc. for August 20Y9:Cash balance according to the company's records at August 31, $38,928.Cash balance according to the bank statement at August 31, $37,960.Checks outstanding, $15,080.Deposit in transit, not recorded by bank, $16,120.A check for $312 issued in payment of an account to a supplier was erroneously recorded by Wolfpack Bread Inc. as $123.Bank debit memo for service charges, $162.Record the effects on the accounts and financial statements of the company based upon the information above. If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts. ### Understanding the Impact of Cash Transactions on Financial StatementsThis section explains how increases and decreases in cash affect various financial statements, including the Balance Sheet, Statement of Cash Flows, and Income Statement. #### Increase in Cash**Date: August 31**- **Balance Sheet:** - **Assets:** - **Cash:** Increase - **No Effect:** No change - **Liabilities:** - **Accounts Payable:** Increase - **Stockholders' Equity:** - **No Effect:** No change- **Statement of Cash Flows:** - **Operating:** Increase- **Income Statement:** - **No Effect:** No change#### Decrease in Cash**Date: August 31**- **Balance Sheet:** - **Assets:** - **Cash:** Decrease - **No Effect:** No change - **Liabilities:** - **No Effect:** No change - **Stockholders' Equity:** - **Retained Earnings:** Decrease- **Statement of Cash Flows:** - **Operating:** Decrease- **Income Statement:** - **Miscellaneous Expense:** IncreaseIn the diagrams above, changes are marked with checks (✓) to indicate an increase or no effect, and with an "X" to indicate a decrease. For the **Increase in Cash**:- **Balance Sheet:** Cash and Accounts Payable both increase, with no effect on other components.- **Statement of Cash Flows:** The increase is recorded under Operating activities.- **Income Statement:** There is no effect.For the **Decrease in Cash**:- **Balance Sheet:** Cash decreases and Retained Earnings decrease, with no effect on other components.- **Statement of Cash Flows:** The decrease is recorded under Operating activities.- **Income Statement:** A miscellaneous expense is recorded, indicating an increase.These visualizations help in understanding the interplay between cash transactions and how they are reflected across different financial statements.

Introduction: Balance sheet: All Assets and liabilities are shown in Balance sheet. It tells the net…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Entries for Bank Reconciliation

The following data were accumulated for use in reconciling the bank account of Wolfpack Bread Inc. for August 20Y9:

Cash balance according to the company's records at August 31, $38,928.
Cash balance according to the bank statement at August 31, $37,960.
Checks outstanding, $15,080.
Deposit in transit, not recorded by bank, $16,120.
A check for $312 issued in payment of an account to a supplier was erroneously recorded by Wolfpack Bread Inc. as $123.
Bank debit memo for service charges, $162.

Record the effects on the accounts and financial statements of the company based upon the information above. If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.

### Understanding the Impact of Cash Transactions on Financial Statements

This section explains how increases and decreases in cash affect various financial statements, including the Balance Sheet, Statement of Cash Flows, and Income Statement.

#### Increase in Cash

**Date: August 31**
- **Balance Sheet:**
- **Assets:**
- **Cash:** Increase
- **No Effect:** No change
- **Liabilities:**
- **Accounts Payable:** Increase
- **Stockholders' Equity:**
- **No Effect:** No change

- **Statement of Cash Flows:**
- **Operating:** Increase

- **Income Statement:**
- **No Effect:** No change

#### Decrease in Cash

**Date: August 31**
- **Balance Sheet:**
- **Assets:**
- **Cash:** Decrease
- **No Effect:** No change
- **Liabilities:**
- **No Effect:** No change
- **Stockholders' Equity:**
- **Retained Earnings:** Decrease

- **Statement of Cash Flows:**
- **Operating:** Decrease

- **Income Statement:**
- **Miscellaneous Expense:** Increase

In the diagrams above, changes are marked with checks (✓) to indicate an increase or no effect, and with an "X" to indicate a decrease.

For the **Increase in Cash**:
- **Balance Sheet:** Cash and Accounts Payable both increase, with no effect on other components.
- **Statement of Cash Flows:** The increase is recorded under Operating activities.
- **Income Statement:** There is no effect.

For the **Decrease in Cash**:
- **Balance Sheet:** Cash decreases and Retained Earnings decrease, with no effect on other components.
- **Statement of Cash Flows:** The decrease is recorded under Operating activities.
- **Income Statement:** A miscellaneous expense is recorded, indicating an increase.

These visualizations help in understanding the interplay between cash transactions and how they are reflected across different financial statements.

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