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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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OBJECTIVE Problem 4-53.11 Bank Reconfirmation

E Shortly after July 31, Morse CorporaLion received a bank statement containing the following information:

Date | Checks | Deposits | Balance

6130 Bag. balance 3 2,958

711 $ 1,200 9,158

'112 5 620 $ 550 $ 344 12.500 20,144

mwmm 7:3 35 8,100 12,009

'115 311 9'! 4.000 9.100 16,701

'1'!9 4,500 '1'90 286 11,125

?112 34 ?.100 3,991

'1115 634 1.880 7.000 8,4'1'7

'1119 3,280 414 4,283

'1124 1,492 649 2,142

2129 350 61'?“ 4.620 5,735

?131 5'15 18" 5,142

’NSFched:

“Bank service charge July for cash zransacLions and balances on Morse’s records are shown in the following T-account:

Cash

Balance. 6130 $ 7.609

Amount Check Check C heck Check

Date Deposited Number Amount Number Amount

1!} $12,500 [‘16 $8,100 186 $ 1,880

715 9,100 1'17 9'." 13-; 634

7115 7,000 178 4,000 188 3, 780

7129 4.621] [‘19 31 1 189 649

7131] 2,050 180 '1, 100 190 1,492

Total deposits $35,220 181 4,500 191 31

182 “190 I92 350

183 34 193 5'15

184 286 194 22'1

185 414 195 1,123

Balance. 7131 $ 6,500 Total adjustment $36,379

Required:

1. Prepare a bank reconciliation for July.

2. Prepare the adjusting entries made by Morse Corporation as a result of 1111s reconciliation process.

3. What amount is reported as cash on the balance sheet at July 31?

1.

To determine

To prepare: A bank reconciliation.

Introduction:.Bank reconciliation is a process in which, bank account which is prepared in the books of company and is compared with the bank statement issued by bank. The difference in balances is then adjusted by recording appropriate adjusting entries.

Explanation

Reconciliation of Bank statement:

    ParticularsAmount($)Amount($)
    Closing balance5,142
    Add: Deposit in transit2,050
    Less: Outstanding checks
    Check-19137
    Check-194227
    Check-1951,123(1,

2.

To determine

To prepare: Journal entries to record adjustments required because of bank reconciliation process.

Introduction: Journal entries provide a record of the financial activities undertaken within an organization. Journal entries helps in preparation of financial statements of a company.

3.

To determine

The cash balance to be reported on the balance sheet at July 31st.

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