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Intermediate Accounting: Reporting...

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

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Unknown Book Balance (Appendix 6.1) The following information pertains to the Cash account of Nakamoto Corporation for the month of July 2019:

Chapter 6, Problem 17P, Unknown Book Balance (Appendix 6.1) The following information pertains to the Cash account of

Required:

  1. 1. Prepare a bank reconciliation to determine Nakamoto’s adjusted cash balance on July 31.
  2. 2. Next Level Determine Nakamoto’s unadjusted cash balance (per books) on July 31.
  3. 3. Prepare the adjusting entries necessary to bring Nakamoto’s cash account balance up to date on July 31.

1.

To determine

Ascertain the Corporation N’s adjusted cash balance by preparing a bank reconciliation statement on July 31.

Explanation

Bank reconciliation statement:

Bank reconciliation statement is a report that summarizes the banking and business  activity by reconciling the company’s bank accounts with its financial records. And it compares the bank balance shown in the company’s bank statement with the balance stated in the bank statement.

Prepare bank reconciliation statement:

Corporation N
Bank Reconciliation Statement
July 31, 2019
Balance from bank statement  $22,639.54
Add: Deposit in transit$2,420.98  
Cash on hand awaiting deposit $1,824.42$4,245.40
  $26,884.94
Deduct: Outstanding checks:  
                    #257 $42.17  
                    #271$120...

2.

To determine

Ascertain the Corporation N’s unadjusted cash balance as per books on July 31.

3.

To determine

Record the adjusting entries to make the cash balance of Corporation N up to date on July 31.

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