Sunshine Interiors deposits all cash receipts each Wednesday and Friday in a night depositoryafter banking hours. The data required to reconcile the bank statement as of July 31 havebeen taken from various documents and records and are reproduced as follows. The sourcesof the data are printed in capital letters. All checks were written for payments on account.BANK RECONCILIATION FOR PRECEDING MONTH (DATED JUNE 30):Cash balance according to bank statement..Add deposit of June 30, not recorded by bank..$ 9,422.80780.80Deduct outstanding checks:No. 580 ....$310.10No. 60285.50No. 61292.50137.50No. 613625.60$ 9,578.00$ 9,605.70Adjusted balance.Cash balance according to company's records..Deduct bank service charges...Adjusted balance....27.70$ 9,578.00CASH ACCOUNT:Balance as of July 1$ 9,578.00CASH RECEIPTS FOR MONTH OF JULY6,465.42DUPLICATE DEPOSIT TICKETS:Date and amount of each deposit in July:DateAmountDateAmountDateAmount$ 713.45July 12July 2$569.50$580.70July 23600.10701.801626601.50819.2419701.26311,177.87 CHECKS WRITTEN:Number and amount of each check issued in July:AmountCheck No.AmountCheck No.Check No.Amount$243.50628$ 837.70614621$309.50Void329.90615350.10622629Void882.80616279.90623630617395.50624707.016311,081.56618435.40625158.63632325.40619320.10626550.03633310.08620238.87627381.73634241.71Total amount of checks issued in July$8,379.42JULY BANK STATEMENT:PAGEMEMBER FDICACCOUNT NUMBERAMERICAN NATIONAL BANKOF DETROITTO 7/31/20YBFROM 7/01/20YB(313) 933-8547DETROIT, MI 48201-2500BALANCE0,482.809 DEPOSITS8,088.3520 WITHDRAWAL57,8B8.74SUNSHINE INTERIORS4 OTHER DEBITSAND CREDITS3,740.000RNEW BALANCE11,601.41- DEPOGITS --- DATE -. – BALANOE-.CHECKS AND OTHER DEBITS-310. 10BB. B0Nо.BвоNae1202.B07в0.8007 /019,801.00No.60810,041.B0Na814343.80Be0.80No.618Зв0.10Na.e16a70.00701.8007/0810,113.30B10.9407/1110,101.04No.61730B.B0Nae18435.40No. 630Na. 63407/15No.619320.10338.87Ba0.7010,123.37300.80ME 4,000.00No.6a1707.0107/1413,108.8eNo.638168.03180.0007/14No.eaeBB0.0312,868.30No.62707/17318.73No.630330.00800.1013,800.87No.63088a.80No.631 1,081.66 NEF 37S.0007/2010,170.31O7/a110,304.48No.638328.40No.634241.71701.38731.4807/2411,058.0111,687.4111,801.41801.8007/2836.0007/31OD - OVERDRAPTBо — ЕНВОв СОВНЕСТОNмS -- МзолANEOUSPS - PAYMENT STOPPED80 - SERVICE CHARGENEF - NOT SUFFICIENT FUNDS......THE RECONCILEMENT OF THIS STATEMEKNT WITH YOUR HECORDS IE E38ENTIAL.ANY EHHOH OR EXCEPTION EHOULD BE REPORTED IMMEDIATELY.Instructions1. Prepare a bank reconciliation as of July 31. If errors in recording deposits or checksare discovered, assume that the errors were made by the company. Assume that alldeposits are from cash sales. All checks are written to satisfy accounts payable.2. Journalize the necessary entries. The accounts have not been closed.3. What is the amount of Cash that should appear on the balance sheet as of July 31?Assume that a canceled check for $180 has been incorrectly recorded by thebank as $1,800. Briefly explain how the error would be included in a bank reconcili-4.ation and how it should be corrected.

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Asked Dec 16, 2019
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Sunshine Interiors deposits all cash receipts each Wednesday and Friday in a night depository
after banking hours. The data required to reconcile the bank statement as of July 31 have
been taken from various documents and records and are reproduced as follows. The sources
of the data are printed in capital letters. All checks were written for payments on account.
BANK RECONCILIATION FOR PRECEDING MONTH (DATED JUNE 30):
Cash balance according to bank statement..
Add deposit of June 30, not recorded by bank..
$ 9,422.80
780.80
Deduct outstanding checks:
No. 580 ....
$310.10
No. 602
85.50
No. 612
92.50
137.50
No. 613
625.60
$ 9,578.00
$ 9,605.70
Adjusted balance.
Cash balance according to company's records..
Deduct bank service charges...
Adjusted balance....
27.70
$ 9,578.00
CASH ACCOUNT:
Balance as of July 1
$ 9,578.00
CASH RECEIPTS FOR MONTH OF JULY
6,465.42
DUPLICATE DEPOSIT TICKETS:
Date and amount of each deposit in July:
Date
Amount
Date
Amount
Date
Amount
$ 713.45
July 12
July 2
$569.50
$580.70
July 23
600.10
701.80
16
26
601.50
819.24
19
701.26
31
1,177.87
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Sunshine Interiors deposits all cash receipts each Wednesday and Friday in a night depository after banking hours. The data required to reconcile the bank statement as of July 31 have been taken from various documents and records and are reproduced as follows. The sources of the data are printed in capital letters. All checks were written for payments on account. BANK RECONCILIATION FOR PRECEDING MONTH (DATED JUNE 30): Cash balance according to bank statement.. Add deposit of June 30, not recorded by bank.. $ 9,422.80 780.80 Deduct outstanding checks: No. 580 .... $310.10 No. 602 85.50 No. 612 92.50 137.50 No. 613 625.60 $ 9,578.00 $ 9,605.70 Adjusted balance. Cash balance according to company's records.. Deduct bank service charges... Adjusted balance.... 27.70 $ 9,578.00 CASH ACCOUNT: Balance as of July 1 $ 9,578.00 CASH RECEIPTS FOR MONTH OF JULY 6,465.42 DUPLICATE DEPOSIT TICKETS: Date and amount of each deposit in July: Date Amount Date Amount Date Amount $ 713.45 July 12 July 2 $569.50 $580.70 July 23 600.10 701.80 16 26 601.50 819.24 19 701.26 31 1,177.87

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CHECKS WRITTEN:
Number and amount of each check issued in July:
Amount
Check No.
Amount
Check No.
Check No.
Amount
$243.50
628
$ 837.70
614
621
$309.50
Void
329.90
615
350.10
622
629
Void
882.80
616
279.90
623
630
617
395.50
624
707.01
631
1,081.56
618
435.40
625
158.63
632
325.40
619
320.10
626
550.03
633
310.08
620
238.87
627
381.73
634
241.71
Total amount of checks issued in July
$8,379.42
JULY BANK STATEMENT:
PAGE
MEMBER FDIC
ACCOUNT NUMBER
AMERICAN NATIONAL BANK
OF DETROIT
TO 7/31/20YB
FROM 7/01/20YB
(313) 933-8547
DETROIT, MI 48201-2500
BALANCE
0,482.80
9 DEPOSITS
8,088.35
20 WITHDRAWAL5
7,8B8.74
SUNSHINE INTERIORS
4 OTHER DEBITS
AND CREDITS
3,740.000R
NEW BALANCE
11,601.41
- DEPOGITS --- DATE -. – BALANOE-.
CHECKS AND OTHER DEBITS-
310. 10
BB. B0
Nо.Bво
Nae12
02.B0
7в0.80
07 /01
9,801.00
No.608
10,041.B0
Na814
343.80
Be0.80
No.618
Зв0.10
Na.e16
a70.00
701.80
07/08
10,113.30
B10.94
07/11
10,101.04
No.617
30B.B0
Nae18
435.40
No. 630
Na. 634
07/15
No.619
320.10
338.87
Ba0.70
10,123.37
300.80
ME 4,000.00
No.6a1
707.01
07/14
13,108.8e
No.638
168.03
180.00
07/14
No.eae
BB0.03
12,868.30
No.627
07/17
318.73
No.630
330.00
800.10
13,800.87
No.630
88a.80
No.631 1,081.66 NEF 37S.00
07/20
10,170.31
O7/a1
10,304.48
No.638
328.40
No.634
241.71
701.38
731.48
07/24
11,058.01
11,687.41
11,801.41
801.80
07/28
36.00
07/31
OD - OVERDRAPT
Bо — ЕНВОв СОВНЕСТОN
мS -- МзолANEOUS
PS - PAYMENT STOPPED
80 - SERVICE CHARGE
NEF - NOT SUFFICIENT FUNDS
...
...
THE RECONCILEMENT OF THIS STATEMEKNT WITH YOUR HECORDS IE E38ENTIAL.
ANY EHHOH OR EXCEPTION EHOULD BE REPORTED IMMEDIATELY.
Instructions
1. Prepare a bank reconciliation as of July 31. If errors in recording deposits or checks
are discovered, assume that the errors were made by the company. Assume that all
deposits are from cash sales. All checks are written to satisfy accounts payable.
2. Journalize the necessary entries. The accounts have not been closed.
3. What is the amount of Cash that should appear on the balance sheet as of July 31?
Assume that a canceled check for $180 has been incorrectly recorded by the
bank as $1,800. Briefly explain how the error would be included in a bank reconcili-
4.
ation and how it should be corrected.
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CHECKS WRITTEN: Number and amount of each check issued in July: Amount Check No. Amount Check No. Check No. Amount $243.50 628 $ 837.70 614 621 $309.50 Void 329.90 615 350.10 622 629 Void 882.80 616 279.90 623 630 617 395.50 624 707.01 631 1,081.56 618 435.40 625 158.63 632 325.40 619 320.10 626 550.03 633 310.08 620 238.87 627 381.73 634 241.71 Total amount of checks issued in July $8,379.42 JULY BANK STATEMENT: PAGE MEMBER FDIC ACCOUNT NUMBER AMERICAN NATIONAL BANK OF DETROIT TO 7/31/20YB FROM 7/01/20YB (313) 933-8547 DETROIT, MI 48201-2500 BALANCE 0,482.80 9 DEPOSITS 8,088.35 20 WITHDRAWAL5 7,8B8.74 SUNSHINE INTERIORS 4 OTHER DEBITS AND CREDITS 3,740.000R NEW BALANCE 11,601.41 - DEPOGITS --- DATE -. – BALANOE-. CHECKS AND OTHER DEBITS- 310. 10 BB. B0 Nо.Bво Nae12 02.B0 7в0.80 07 /01 9,801.00 No.608 10,041.B0 Na814 343.80 Be0.80 No.618 Зв0.10 Na.e16 a70.00 701.80 07/08 10,113.30 B10.94 07/11 10,101.04 No.617 30B.B0 Nae18 435.40 No. 630 Na. 634 07/15 No.619 320.10 338.87 Ba0.70 10,123.37 300.80 ME 4,000.00 No.6a1 707.01 07/14 13,108.8e No.638 168.03 180.00 07/14 No.eae BB0.03 12,868.30 No.627 07/17 318.73 No.630 330.00 800.10 13,800.87 No.630 88a.80 No.631 1,081.66 NEF 37S.00 07/20 10,170.31 O7/a1 10,304.48 No.638 328.40 No.634 241.71 701.38 731.48 07/24 11,058.01 11,687.41 11,801.41 801.80 07/28 36.00 07/31 OD - OVERDRAPT Bо — ЕНВОв СОВНЕСТОN мS -- МзолANEOUS PS - PAYMENT STOPPED 80 - SERVICE CHARGE NEF - NOT SUFFICIENT FUNDS ... ... THE RECONCILEMENT OF THIS STATEMEKNT WITH YOUR HECORDS IE E38ENTIAL. ANY EHHOH OR EXCEPTION EHOULD BE REPORTED IMMEDIATELY. Instructions 1. Prepare a bank reconciliation as of July 31. If errors in recording deposits or checks are discovered, assume that the errors were made by the company. Assume that all deposits are from cash sales. All checks are written to satisfy accounts payable. 2. Journalize the necessary entries. The accounts have not been closed. 3. What is the amount of Cash that should appear on the balance sheet as of July 31? Assume that a canceled check for $180 has been incorrectly recorded by the bank as $1,800. Briefly explain how the error would be included in a bank reconcili- 4. ation and how it should be corrected.

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Expert Answer

Step 1
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Bank reconciliation: Bank statement is prepared by bank. The company maintains its own records from its perspective. This is why the cash balance per bank and cash balance per books seldom agree. Bank reconciliation is the statement prepared by company to remove the differences and disagreement between cash balance per bank and cash balance per books. Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically. Debit and credit rules: Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders' equity accounts. Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders' equity accounts.

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Prepare bank reconciliation of Company SI as at July 31. Company SI Bank Reconciliation At July 31 Amount ($) 11,601.41 Amount ($) Particulars Cash balance as per bank statement Add: Deposit of July 31, not recorded by bank Less: Outstanding checks No : 613 No : 628 No : 633 Adjusted cash balance per bank 1,177.84 137.50 837.70 310.08 1.285..28 11.494.00 Cash balance as per books Add: Notes and interest receivable collected by bank Error in July 23 deposit Error in recording check no.627 7,664.00 4,160.00 18.00 63.00 4,241.00 Less: Checks returned because of insufficient funds Bank service charges Adjusted cash balance per books 375.00 411.00 11.494.00 36.00

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Working Notes: Determine the balance per company's book, June 30 ´Cash balance, July 1 Balance per Bank account, July 31 =|+ July receipts - July disbursments = $9,578.00 + $6, 465.42 – $8,379.42 = $7,664.00

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