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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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Brief Exercise 4-27 Bank Reconciliation

Hula Corp. utilizes J.P. Morgan Chase in its banking transactions. For the month of August, 2019, J. p. Morgan Chase presented Hula with its bank statement as follows:

Balance, August 31 , 2019 $64,900

Service charge for August 100

Interest earned during August 875

NSF check from Jeffrey Corp. (deposited by Hula) 450

Note ($11,000 and interest ($425) collected for Hula from a customer 11,425

Upon receiving the bank statement, Hula’s accountants analyzed its cash transactions for possible reconciling items between its cash balance per books and J.P. Morgan Chase’s cash balance:

Checking account balance per Hula’s books $53,453

Outstanding checks as of August 31 3,700

Deposit in transit at August 31 3,940

Error in recording check 9288 issued by Hula 63

The correct amount of check 9288 is $770. It was recorded as a cash disbursement of $707 by mistake. The check was issued to pay for merchandise purchases. The check appeared on the bank statement correctly.

Required:

Prepare a bank reconciliation schedule at August 31, 2019, in proper form.

To determine

Introduction:

Bank Reconciliation statement is the statement reconcile the two book which one is cash book and another one is pass book (bank book). In these two books there was an error either form the side of company or either form the side of bank and thereafter company reconcile these two books.

To choose:

Prepare bank reconciliation schedule at August 31, 2019.

Explanation
    ParticularDetailAmount ($)
    Balance as per bank statement

    (-) Outstanding check as of august 31

    (+) Deposit in transit august, 31

    (+) Error in recording check 9288

    Adjusted cash balance

    Balance as per cash book

    (-) Service charges

    (+) Interest earned during the year

    (-) NSF check form Jeffery

    (+) Note and interest deposited collected for hula customer

    Adjusted cash balance

    (3700)

    3940

    63

    (100)

    875

    (450)

    11425

    64900

    303

    65203

    53453

    11750

    65203

1...

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