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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Cornerstone Exercise 4-16 Bank Reconciliation

Firebird Corp. prepares monthly bank reconciliations of its checking account balance. The bank statement for February 2019 indicated the following:

Chapter 4, Problem 16CE, Cornerstone Exercise 4-16 Bank Reconciliation Firebird Corp. prepares monthly bank reconciliations , example  1

An analysis of canceled checks and deposits and the records of Firebird Corp. revealed the following items:

Chapter 4, Problem 16CE, Cornerstone Exercise 4-16 Bank Reconciliation Firebird Corp. prepares monthly bank reconciliations , example  2

The correct amount of check #7853 is $797. It was recorded as a cash disbursement of $779 by mistake. The check was issued to pay for merchandise purchases. The check on the bank statement correctly.

Required:

  1. Prepare a bank reconciliation schedule at February 28, 2019, in proper form.
  2. What is the amount of cash that should reported on the February 28, 2019 balance sheet?

1.

To determine

Concept Introduction:

Bank reconciliation statement is basically defined as a statement which reconciles the bank balances with the cash balance. In other words, it reconciles the difference that exists between bank passbook and cash book.

To Prepare:

A bank reconciliation statement as on February 28, 2019

Explanation

FIREBIRD CORP.

BANK RECONCILIATION STATEMENT

As on February 28, 2019

    ParticularsAmountAmount
    Cash Balance from bank statement
      $87,392
    Add:
    Deposit in Transit
    $4,785
      $4,785
    Less:
    Outstanding Checks

      ($6,440)

      ($6,440)
    Adjusted Cash Balance
      $85,737

2.

To determine

Concept Introduction:

Bank reconciliation statement is basically defined as a statement which reconciles the bank balances with the cash balance. In other words, it reconciles the differences that exists between bank passbook and cash book.

TO CALCULATE

The amount to be reported on February 28, 2019 in the balance sheet

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