Epto Ergo's bank statement from Crypto Bank at July 31, 2020, gives thefollowing information.$18,400Balance, July 1August depositsChecks cleared in JulyBank debit memorandum:$Safety deposit box feeService chargeBalance, July 3171,0002568,67850Bank credit memorandum:20,692Interest earned45A summary of the Cash account in the ledger for July shows the following:balance, July 1, $18,700; receipts $74,000; disbursements $73,570;and balance, July 31, $19,130.Analysis reveals that the only reconciling items on the June 30 bank reconciliation were adeposit in transit for $4,800 and outstanding checks of $4,500. In addition, you determine thatthere was an error involving a company check drawn in July: A check for $400 to a creditor onaccount that cleared the bank in July was journalized and posted for $4.Instructionsa) Determine deposits in transit.b) Determine outstanding checks. (Hint: You need to correct disbursements for thecheck error.)c) Prepare a bank reconciliation at July 31.d) Journalize the adjusting entry(ies) to be made by Epto Ergo at July 31.

Certain transactions are not reflected in bank statement on real time basis as the banks time to…

Answered: Prepare a bank reconciliation at July…

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter5: Cash Control Systems

Section: Chapter Questions

Problem 2AP

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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: $456
Complex Balance Sheet Presented below is the unaudited balance sheet as of December 31, 2019, prepared by Zeus Manufacturing Corporations bookkeeper. Your company has been engaged to perform an audit, during which you discover the following information: 1. Checks totaling 14,000 in payment of accounts payable were mailed on December 31, 2019, but were not recorded until 2020. Late in December 2019, the bank returned a customers 2,000 check marked NSF, but no entry was made. Cash includes 100,000 restricted for building purposes. 2. Included in accounts receivable is a 30,000 note due on December 31, 2022, from Zeuss president. 3. During 2019, Zeus purchased 500 shares of common stock of a major corporation that supplies Zeus with raw materials. Total cost of this stock was 51,300, and fair value on December 31, 2019, was 51,300. Zeus plans to hold these shares indefinitely. 4. Treasury stock was recorded at cost when Zeus purchased 200 of its own shares for 32 per share in May 2019. This amount is included in investments. 5. On December 31, 2019, Zeus borrowed 500,000 from a bank in exchange for a 10% note payable, manning December 31, 2024. Equal principal payments are due December 31 of each year beginning in 2020. This note is collateralized by a 250,000 tract of land acquired as a potential future building site, which is included in land. 6. The mortgage payable requires 50,000 principal payments, plus interest, at the end of each month. Payments were made on January 31 and February 28, 2020. The balance of this mortgage was due June 30, 2020. On March 1, 2020, prior to issuance of the audited financial statements, Zeus consummated a non-cancelable agreement with the lender to refinance this mortgage. The new terms require 100,000 annual principal payments, plus interest, on February 28 of each year, beginning in 2021. The final payment is due February 28, 2028. 7. The lawsuit liability will be paid in 2020. 8. Of the total deferred tax liability; 5,000 is considered a current liability. 9. The current income tax expense reported in Zeuss 2019 income statement was 61,200. 10. The company was authorized to issue 100,000 shares of 50 par value common stock.

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