Survey of Accounting (Accounting I)
8th Edition
ISBN: 9781305961883
Author: Carl Warren
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 5, Problem 5.3.2P
To determine
Concept Introduction:
Bank Reconciliation:
Bank reconciliation is the process in which the entity reconciles its cash entries in accounts with the entries in bank statement issued by the bank. The entity prepares
To Indicate:
The effect of bank reconciliation on accounts and financial statement
Expert Solution & Answer
Answer to Problem 5.3.2P
The effect of bank reconciliation on accounts and financial statement is shown using
| Bank Reconciliation | |||
| Journal Entries | |||
| Date | Accounts titles and Explanation | Debit | Credit |
| Apr. 30 | Cash | $ 4,320 | |
| Interest Income | $ 320 | ||
| Notes Receivable | $ 4,000 | ||
| (Being note collected by bank) | |||
| Apr. 30 | Cash | $ 990 | |
| Accounts Payable | $ 990 | ||
| (Being adjustment made for error in check) | |||
| Oct. 31 | $ 1,300 | ||
| Cash | $ 1,300 | ||
| (Being adjustment made for NSF check) | |||
| Oct. 31 | Bank Charges | $ 75 | |
| Cash | $ 75 | ||
| (Being adjustment made for Bank Charges) | |||
Explanation of Solution
The bank reconciliation statement is prepared as follows:
| All American Sports Co. | |||||
| Bank Reconciliation Statement | |||||
| As of Apr. 30, 20Y5 | |||||
| Bank Side | Book Side | ||||
| Balance as per Bank statement | 40,360 | Balance as per | 30,950 | ||
| Add: | Add: | ||||
| Deposit in transit | 9,275 | Collection of Note | 4,000 | ||
| Interest on Note | 320 | ||||
| Check Error (1100-110) | 990 | 5,310 | |||
| Less: | Less: | ||||
| Outstanding Checks | (14,300) | NSF Check | (1,300) | ||
| Bank Error (720-270) | (450) | (14,750) | Bank Service Charges | (75) | (1,375) |
| Reconciled Balance | 34,885 | Reconciled Balance | 34,885 | ||
The effect of bank reconciliation on accounts and financial statement is shown using adjusting
| All American Sports Co. | |||
| Bank Reconciliation | |||
| Journal Entries | |||
| Date | Accounts titles and Explanation | Debit | Credit |
| Apr. 30 | Cash | $ 4,320 | |
| Interest Income | $ 320 | ||
| Notes Receivable | $ 4,000 | ||
| (Being note collected by bank) | |||
| Apr. 30 | Cash | $ 990 | |
| Accounts Payable | $ 990 | ||
| (Being adjustment made for error in check) | |||
| Oct. 31 | Accounts Receivable | $ 1,300 | |
| Cash | $ 1,300 | ||
| (Being adjustment made for NSF check) | |||
| Oct. 31 | Bank Charges | $ 75 | |
| Cash | $ 75 | ||
| (Being adjustment made for Bank Charges) | |||
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Bank reconciliation and entries
The cash account for collegiate Sports Co. on November 1, 20Y9, indicated a balance of $81, 145. During November, the total cash deposited was $293,150, and checks written totaled $307, 360.The bank statement indicated a balance of $112,675 on November 30,20Y9. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:
A. Checks outsstanding totaled $41,840.
B. A deposit of $12,200, representing receipts of November 30, had been made too late to appear on the bank statement.
C. A check for $7,250 had been incorrectly charged by the bank as $2,750.
D. A check for $760 returned with the statement had been recorded by Collegiate Sports Co. as $7,600. The check was for the payment of an obligation to Ramirez Co. on account.
E. The bank had collected for Collegiate Sports Co. $7,385 on a note left for collection. The face of the note was $7,000.
F. Bank service charges for…
Bank Reconciliation and Entries
The cash account for Collegiate Sports Co. on November 1, 20Y9, indicated a balance of $12,710. During
November, the total cash deposited was $70,770 and checks written totaled $65,710. The bank statement
indicated a balance of $23,990 on November 30, 20Y9. Comparing the bank statement, the canceled checks, and
the accompanying memos with the records revealed the following reconciling items:
a. Checks outstanding totaled $10,690.
b. A deposit of $8,700, representing receipts of November 30, had been made too late to appear on the bank
statement,
c. A check for $940 had been incorrectly charged by the bank as $490.
d. A check for $140 returned with the statement had been recorded by Collegiate Sports Co. as $410. The check
was for the payment of an obligation to Ramirez Co. on account.
e. The bank had collected for Collegiate Sports Co. $4,600 on a note left for collection. The face of the note was
$4,250.
f. Bank service charges for November amounted to…
Bank Reconciliation and Entries
The cash account for Highlander Diamond Co. on April 1, 20Y5, indicated a balance of $35,400. During April, the total cash deposited was $120,255, and checks written totaled $109,200. The bank statement indicated a balance of $60,927 on April
30, 20Y5. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:
a. Checks outstanding totaled $21,450.
b. A deposit of $13,913, representing receipts of April 30, had been made too late to appear on the bank statement.
C. A check for $710 had been incorrectly charged by the bank as $170.
d. A check for $220 returned with the statement had been recorded by Highlander Diamond Co. as $2,200. The check was for the payment of an obligation to Dirt Dog Inc. on account.
e. The bank had collected for Highlander Diamond $6,480 on a note left for collection. The face of the note was $6,000.
f. Bank service charges for April amounted to $115.
g.…
Chapter 5 Solutions
Survey of Accounting (Accounting I)
Ch. 5 - Prob. 1SEQCh. 5 - Prob. 2SEQCh. 5 - Prob. 3SEQCh. 5 - Adjustments to the company’s records based on the...Ch. 5 - Prob. 5SEQCh. 5 - Prob. 1CDQCh. 5 - Prob. 2CDQCh. 5 - Prob. 3CDQCh. 5 - Prob. 4CDQCh. 5 - Prob. 5CDQ
Ch. 5 - Prob. 6CDQCh. 5 - Prob. 7CDQCh. 5 - Prob. 8CDQCh. 5 - Prob. 9CDQCh. 5 - Assume that Leslie Hunter, accounts payable clerk...Ch. 5 - Prob. 11CDQCh. 5 - The accounting clerk pays all obligations by...Ch. 5 - Prob. 13CDQCh. 5 - Prob. 14CDQCh. 5 - Do items reported as a credit memorandum on the...Ch. 5 - Prob. 16CDQCh. 5 - Prob. 17CDQCh. 5 - Prob. 5.1ECh. 5 - Prob. 5.2ECh. 5 - Prob. 5.3ECh. 5 - Prob. 5.4ECh. 5 - Prob. 5.5ECh. 5 - Prob. 5.6ECh. 5 - Prob. 5.7ECh. 5 - Prob. 5.8ECh. 5 - Prob. 5.9ECh. 5 - Prob. 5.10ECh. 5 - Prob. 5.11ECh. 5 - Prob. 5.12ECh. 5 - Prob. 5.13ECh. 5 - Prob. 5.14ECh. 5 - Prob. 5.15ECh. 5 - Prob. 5.16ECh. 5 - Prob. 5.17ECh. 5 - Prob. 5.18ECh. 5 - Prob. 5.19ECh. 5 - Entries for note collected by bank Accompanying a...Ch. 5 - Prob. 5.21ECh. 5 - Prob. 5.22ECh. 5 - Prob. 5.23ECh. 5 - Prob. 5.24ECh. 5 - Prob. 5.25ECh. 5 - Prob. 5.1PCh. 5 - Prob. 5.2.1PCh. 5 - Prob. 5.2.2PCh. 5 - Prob. 5.3.1PCh. 5 - Prob. 5.3.2PCh. 5 - Prob. 5.4.1PCh. 5 - Prob. 5.4.2PCh. 5 - Prob. 5.4.3PCh. 5 - Prob. 5.4.4PCh. 5 - Prob. 5.1.1MBACh. 5 - Prob. 5.1.2MBACh. 5 - Prob. 5.1.3MBACh. 5 - Prob. 5.1.4MBACh. 5 - Ratio of cash to monthly cash expenses AcelRx...Ch. 5 - Prob. 5.2.1MBACh. 5 - Prob. 5.2.2MBACh. 5 - Ratio of cash to monthly cash expenses Pacira...Ch. 5 - Ratio of cash to monthly cash expenses Pacira...Ch. 5 - Prob. 5.2.5MBACh. 5 - Prob. 5.3.1MBACh. 5 - Prob. 5.3.2MBACh. 5 - Prob. 5.3.3MBACh. 5 - Prob. 5.3.4MBACh. 5 - Prob. 5.3.5MBACh. 5 - Prob. 5.4.1MBACh. 5 - Prob. 5.4.2MBACh. 5 - Prob. 5.1CCh. 5 - Prob. 5.2CCh. 5 - Prob. 5.3CCh. 5 - Prob. 5.4CCh. 5 - Prob. 5.5.1CCh. 5 - Prob. 5.5.2CCh. 5 - Prob. 5.5.3CCh. 5 - Prob. 5.6C
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Using the following information, prepare a bank reconciliation. Bank balance: $12,565. Book balance: $13,744. Deposits in transit: $2,509. Outstanding checks: $1,777. Bank charges: $125. Bank incorrectly charged the account for $412. The bank will correct the error next month. Check number 1879 correctly cleared the bank in the amount of $562 but posted in the accounting records as $652. This check was expensed to Utilities Expense.arrow_forwardThe bank reconciliation shows the following adjustments. Deposits in transit: $1,698 Notes receivable collected by bank: $2,500; interest: $145 Outstanding checks: $987 Error by bank: $436 Bank charges: $70 Prepare the correcting journal entry.arrow_forwardUsing the following information, prepare a bank reconciliation. Bank balance: $3,678 Book balance: $2,547 Deposits in transit: $321 Outstanding checks: $108 and $334 Bank charges: $25 Notes receivable: $1,000; interest: $35arrow_forward
- Using the following information, prepare a bank reconciliation. Bank balance: $4,587 Book balance: $5,577 Deposits in transit: $1,546 Outstanding checks: $956 Interest income: $56 NSF check: $456arrow_forwardThe bank reconciliation shows the following adjustments. Deposits in transit: $526 Outstanding checks: $328 Bank charges: $55 NSF checks: $69 Prepare the correcting journal entry.arrow_forwardThe bank reconciliation shows the following adjustments: Deposits in transit: $1,234 Outstanding checks: $558 Bank service charges: $50 NSF checks: $250 Prepare the correcting journal entry.arrow_forward
- Bank reconciliation and entriesThe cash account for Stone Systems at July 31, 20Y5, indicated a balanceof $17,750. The bank statement indicated a balance of $33,650 on July 31,20Y5. Comparing the bank statement and the accompanying canceledchecks and memos with the records reveals the following reconcilingitems: A. Checks outstanding totaled $17,865.B. A deposit of $9,150, representing receipts of July 31, had beenmade too late to appear on the bank statement.C. The bank had collected $6,095 on a note left for collection. Theface of the note was $5,750.D. A check for $390 returned with the statement had been incorrectly recorded by Stone Systems as $930. The check was forthe payment of an obligation to Holland Co. for the purchase ofoffice supplies on account.E. A check drawn for $1,810 had been incorrectly charged by thebank as $1,180.F. Bank service charges for July amounted to $80. Instructions1. Prepare a bank reconciliation.2. Journalize the necessary entries.3. If a balance sheet…arrow_forwardBank Reconciliation and Entries The cash account for Deaver Consulting at October 31, 20Y6, indicated a balance of $15,750. The bank statement indicated a balance of $31.095 on October 31, 20Y6. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: a. Checks outstanding totaled $10,125. b. A deposit of $4,120, representing receipts from October 31, had been made too late to appear on the bank statement. c. The bank had collected $10,400 on a note left for collection. The face of the note was $10,000. d. A check for $1,200 returned with the statement had been incorrectly recorded by Deaver Consulting as $120. The check was for the payment of an obligation to Oxford Office Supplies Co. for the purchase of office supplies on account. e. A check drawn for $320 had been incorrectly charged by the bank as $230. f. Bank service charges for October amounted to $70. Instructions: 1. Prepare a bank reconciliation.…arrow_forwardBank Reconciliation and Entries The cash account for Brentwood Bike Co. at May 1 indicated a balance of $14,170. During May, the total cash deposited was $71,700 and checks written totaled $66,570. The bank statement indicated a balance of $24,310 on May 31. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items: Checks outstanding totaled $10,830. A deposit of $8,820, representing receipts of May 31, had been made too late to appear on the bank statement. The bank had collected for Brentwood Bike Co. $4,660 on a note left for collection. The face of the note was $4,300. A check for $360 returned with the statement had been incorrectly charged by the bank as $630. A check for $630 returned with the statement had been recorded by Brentwood Bike Co. as $360. The check was for the payment of an obligation to Adkins Co. on account. Bank service charges for May amounted to $40. A check for $1,080 from Jennings…arrow_forward
- Bank Reconciliation and Entries The cash account for Brentwood Bike Co. at May 1 indicated a balance of $14,300. During May, the total cash deposited was $71,330 and checks written totaled $66,230. The bank statement indicated a balance of $24,180 on May 31. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items: Checks outstanding totaled $10,770. A deposit of $8,770, representing receipts of May 31, had been made too late to appear on the bank statement. The bank had collected for Brentwood Bike Co. $4,640 on a note left for collection. The face of the note was $4,280. A check for $270 returned with the statement had been incorrectly charged by the bank as $720. A check for $630 returned with the statement had been recorded by Brentwood Bike Co. as $360. The check was for the payment of an obligation to Adkins Co. on account. Bank service charges for May amounted to $70. A check for $1,070 from Jennings…arrow_forwardBank Reconciliation and Entries The cash account for Brentwood Bike Co. at May 1 indicated a balance of $14,370. During May, the total cash deposited was $71,780 and checks written totaled $66,650. The bank statement indicated a balance of $24,330 on May 31. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items: Checks outstanding totaled $10,840. A deposit of $8,830, representing receipts of May 31, had been made too late to appear on the bank statement. The bank had collected for Brentwood Bike Co. $4,670 on a note left for collection. The face of the note was $4,310. A check for $490 returned with the statement had been incorrectly charged by the bank as $940. A check for $520 returned with the statement had been recorded by Brentwood Bike Co. as $250. The check was for the payment of an obligation to Adkins Co. on account. Bank service charges for May amounted to $50. A check for $1,080 from Jennings…arrow_forwardBank reconciliation and entriesThe cash account for Stone Systems at July 31, 20V5, indicated a balance of $12,385. The bank statement indicated a balance of $15,79C on July 31, 20V5. Comparing the bank statement and the accompanying canceled checks and memos with the records reveals the following reconciling items:a. Checks outstanding totaled $5,680.b. A deposit of $5,920, representing receipts of July 31, hed been made toc late tc appear on the bank statement.c. The bank had allected 53,080 on a note left for collection. The Ece of the note was 52,920.d. A check for $700 returned with the staternent had been incorrectly recorded by Stone System,s as $770. The check was for the payment of an obligation to Holland Co. for the purchase of 0Fjce supplies on account,e. A check drawn for SSCC had been incorrectly charged by the bank as $60.f. Sank service charges for July amounted to $45.Required:1. Prepare Sank reconciliation.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub
Corporate Financial AccountingAccountingISBN:9781305653535Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub
Corporate Financial Accounting
Accounting
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning