Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281



Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem

Reconciliation of Bank and Company Cash Amounts (Appendix 6.1) Miller Corporation’s December 31, 2019, bank statement showed a $2,049.25 balance. On this date, Miller’s Cash account reflected a $325.60 overdraft. In reconciling these amounts, the following information is discovered:

  1. 1. Cash on hand for undeposited sales receipts, December 31, $130.25.
  2. 2. Customer NSF check returned with bank statement, $420.40.
  3. 3. Cash sales of $640.25 for the week ended December 18 were recorded on the books. The cashier reports this amount missing, and it was not deposited in the bank.
  4. 4. Note receivable of $2,500 and interest of $25 collected by the bank and not recorded on the books.
  5. 5. Deposit in transit December 31, $350.00.
  6. 6. A customer check for $290.40 in payment of its account was recorded on the books at $940.20.
  7. 7. Outstanding checks, $2,040.55. Includes a duplicate check of $70.85 to C. Brown, who notified Miller that the original was lost. Miller stopped payment on the original check and has already adjusted the cash account in the accounting records for this amount.


  1. 1. Prepare a December 31 bank reconciliation for Miller.
  2. 2. Prepare any journal entries necessary by Miller to record the information from Requirement 1.


To determine

Prepare bank reconciliation statement for Company M for the month ended December 31.


Bank reconciliation:

Bank statement is prepared by bank. The company maintains its own records from its perspective. This is why the cash balance per bank and cash balance per books seldom agree. Bank reconciliation is the statement prepared by company to remove the differences and disagreement between cash balance per bank and cash balance per books.

Company  M
Bank Reconciliation
December 31, 2019
ParticularsAmount in $Amount in $
Balance per bank statement, December 31 2,049.25
 Add: Deposits in transit 350.00 
           Cash on hand  that are not deposited130.25480.25
 Less: Outstanding checks 2,040.55
 Adjusted bank balance 488.95
Balance as per book,  December 31 (325...


To determine

Prepare journal entry to record the given transaction.

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