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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

Hosung Company’s Cash account shows a balance of $801.65 as of August 31 of this year. The balance on the bank statement on that date is $1,383. Checks for $260.50, $425.10, and $331.00 are outstanding. The bank statement shows a check issued by another depositor for $237.25. (In other words, the bank made an error and charged Hosung Company for a check written by another company.) The bank statement also shows an NSF check for $180 received from one of Hosung’s customers. Service charges for the month were $18. What is the adjusted ledger balance of cash as of August 31?

To determine

Prepare bank reconciliation for Company H, as at August 31, to compute the adjusted ledger cash balance.

Explanation

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.

Prepare bank reconciliation for Company H, as at August 31, to compute the adjusted ledger cash balance.

Company H
Bank Reconciliation
August 31, 20--
Bank statement balance $1,383.00
Add: Error in recording check 237.25
  1,620.25
Deduct: Outstanding checks:  
 $260.50 
 425.10 
 331.001,016.60
Adjusted bank statement balance $603.65
   
Ledger balance of cash $801.65
Add:   
   
Deduct:   
 NSF check from customer$180...

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