Homework Help is Here – Start Your Trial Now!
Business
Accounting
The cash account for Stone Systems at July 31, 20Y5, indicated a balance of $8,680. The bank statement indicated a balance of $11,180 on July 31, 20Y5. Comparing the bank statement and the accompanying canceled checks and memos with the records reveals the following reconciling items: Checks outstanding totaled $4,020. A deposit of $4,190, representing receipts of July 31, had been made too late to appear on the bank statement. The bank had collected $2,180 on a note left for collection. The face of the note was $2,070. A check for $700 returned with the statement had been incorrectly recorded by Stone Systems as $770. The check was for the payment of an obligation to Holland Co. for the purchase of office supplies on account. A check drawn for $500 had been incorrectly charged by the bank as $50. Bank service charges for July amounted to $30.

The cash account for Stone Systems at July 31, 20Y5, indicated a balance of $8,680. The bank statement indicated a balance of $11,180 on July 31, 20Y5. Comparing the bank statement and the accompanying canceled checks and memos with the records reveals the following reconciling items: Checks outstanding totaled $4,020. A deposit of $4,190, representing receipts of July 31, had been made too late to appear on the bank statement. The bank had collected $2,180 on a note left for collection. The face of the note was $2,070. A check for $700 returned with the statement had been incorrectly recorded by Stone Systems as $770. The check was for the payment of an obligation to Holland Co. for the purchase of office supplies on account. A check drawn for $500 had been incorrectly charged by the bank as $50. Bank service charges for July amounted to $30.

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter8: Fraud, Internal Controls, And Cash
Section: Chapter Questions
Problem 11EB: Using the following information, prepare a bank reconciliation. Bank balance: $12,565. Book...
See similar textbooks
icon
Related questions
Question
Question Content Area Bank reconciliation and entries The cash account for Stone Systems at July 31, 20Y5, indicated a balance of $8,680. The bank statement indicated a balance of $11,180 on July 31, 20Y5. Comparing the bank statement and the accompanying canceled checks and memos with the records reveals the following reconciling items: Checks outstanding totaled $4,020. A deposit of $4,190, representing receipts of July 31, had been made too late to appear on the bank statement. The bank had collected $2,180 on a note left for collection. The face of the note was $2,070. A check for $700 returned with the statement had been incorrectly recorded by Stone Systems as $770. The check was for the payment of an obligation to Holland Co. for the purchase of office supplies on account. A check drawn for $500 had been incorrectly charged by the bank as $50. Bank service charges for July amounted to $30.
Line Item Description Cash balance according to bank statement Add: Outstanding checks Deduct: Deposit in transit on July 31 Deduct: Bank error in charging check as $50 instead of $500 Total deductions Adjusted balance Cash balance according to company's records Adjustments: Add: Note collected by bank, including $110 interest Add: Error in recording check by Stone Systems Total additions Deduct: Bank service charges Adjusted balance 20Y5 July 31 July 31 Cash Notes Receivable Interest Revenue Accounts Payable-Holland Co. 2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. If an amount box does not require an entry, leave it blank. Miscellaneous Expense Amount Amount $11,180 4,020 Cash 4,190 00 000000 000
Transcribed Image Text:Line Item Description Cash balance according to bank statement Add: Outstanding checks Deduct: Deposit in transit on July 31 Deduct: Bank error in charging check as $50 instead of $500 Total deductions Adjusted balance Cash balance according to company's records Adjustments: Add: Note collected by bank, including $110 interest Add: Error in recording check by Stone Systems Total additions Deduct: Bank service charges Adjusted balance 20Y5 July 31 July 31 Cash Notes Receivable Interest Revenue Accounts Payable-Holland Co. 2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. If an amount box does not require an entry, leave it blank. Miscellaneous Expense Amount Amount $11,180 4,020 Cash 4,190 00 000000 000
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Bank reconciliation statement
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.
Recommended textbooks for you
Principles of Accounting Volume 1
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
College Accounting (Book Only): A Career Approach
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781337280570
Author:
Scott, Cathy J.
Publisher:
South-Western College Pub
College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Financial And Managerial Accounting
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Century 21 Accounting General Journal
Century 21 Accounting General Journal
Accounting
ISBN:
9781337680059
Author:
Gilbertson
Publisher:
Cengage
SEE MORE TEXTBOOKS