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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 4-31 Bank Reconciliation

Zing Corp. prepares monthly bank reconciliations as part of its cash controls. Zing’s bank provided the following amount about Zing’s cash balance at the bank for during the month of April 2020:

Balance. April 30, 2020 $74,350

Service charge for April 75

Note ($3,000) and interest ($90) collected for Zing from a customer 3,090

Interest earned during April 140

NSF check from Orange Corp. (deposited by Zing) for goods purchased on account 470

Zing then analyzed its cash balance on its own set of books, revealing the following details:

Checking account balance per Zing’s books $72,329

Deposit in transit at April 30 2,100

Outstanding checks as of April 30 1,400

Error in recording a check issued by Zing. (Correct amount of the check is $737, but was recorded as a cash disbursement of $773. The check was issued to pay for merchandise originally purchased on account.) 36

Required:

  1. Prepare a bank reconciliation at April 30, 2020, in proper form.
  2. Record any necessary adjusting journal entries.

To determine

Concept Introduction:

Bank Reconciliation:

Bank reconciliation is the process in which the entity reconciles its cash entries in accounts with the entries in bank statement issued by the bank. The entity prepares bank reconciliation statement and it has two sides; Bank Side and Cash side

Requirement-1:

To Prepare:

The Bank reconciliation Statement.

Explanation

The Bank reconciliation Statement is explained as follows:

    Zing Corp.
    Bank Reconciliation Statement
    As of April 30, 2020
    Bank SideBook Side
    Balance as per Bank statement $ 74,350 Balance as per Cash Book $ 72,329
    Add: Add:
    Deposit in transit $ 2,100 Collection of Note and interest $ 3,090
To determine

Concept Introduction:

Bank Reconciliation:

Bank reconciliation is the process in which the entity reconciles its cash entries in accounts with the entries in bank statement issued by the bank. The entity prepares bank reconciliation statement and it has two sides; Bank Side and Cash side

Requirement-2:

To Prepare:

The necessary adjusting entries.

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