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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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Problem 4-585 Bank Reconciliation OBJECTIVE o

Shortly after 111131 3 l, Towanda Corporation received a bank statement containing the following information: E

Dale | Checks | Deposits | Balance

5130 Bag. Balance 5 5,550

'111 $ 500 5,850 @

'112 51; 2'10 1'. 150 s 330 4.500 9.600

215 25 2,025 2,550 mm“

'115 150 450 1,400 10,000 10,550

'119 1.500 25 325 8.200

'1112 500 100 0,100

'1115 1.000 2,100 5,500 7,500

'1119 '15 425 6.800

2124 550 550 5,500

1129 525* 5,015

2131 25” 5.050

“NSF check (depnsihed in previous period, but withdrawn this period)

“Bank service d1arge

July cash transactions and balances on Towanda’s records are shown in the following T-account:

Cash

Balance. H30 S 55%

Amount Check C hack Check Check

Date Deposited Number Amount Number Amount

‘H l S 300 1'16 55 2'10 [36 $ 2.5

‘1'1’5 4,500 17'! 150 [87 [00

T1115 10,000 178 330 188 500

T120 3,500 1'19 25 189 2.00

‘1'1‘30 050 180 '1', 025 [90 [.600

Total deposits 5 [9,250 181 150 [91 '1'5

182 45!] [92 42.5

183 1,400 193 550

184 1,500 194 650

185 325 [95 2'15

Balance, 713] 5 6,275 Total disbursements 5 [8,525

Required:

L Prepare a bank reconciliation for July.

21 Prepare the adjusting amides made by Towanda Corporation as a result of this reconciliation process.

31 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, the bank account which is prepared in the books of company 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 balance5,050
    Add: Deposit in transit950
    Less: Outstanding checks
    Check-195275  (275)
    Balance as per cash book

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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