Bank reconciliation and entries The cash account for Stone Systems at July 31, 20Y5, indicated a balance of $17,750. The bank statement indicated a balance of $33,650 on July 31, 20Y5. Comparing the bank statement and the accompanying canceled checks and memos with the records reveals the following reconciling items: A. Checks outstanding totaled $17,865. B. A deposit of $9,150, representing receipts of July 31, had been made too late to appear on the bank statement. C. The bank had collected $6,095 on a note left for collection. The face of the note was $5,750. D. A check for $390 returned with the statement had been incorrectly recorded by Stone Systems as $930. The check was for the payment of an obligation to Holland Co. for the purchase of office supplies on account. E. A check drawn for $1,810 had been incorrectly charged by the bank as $1,180. F. Bank service charges for July amounted to $80. Instructions 1. Prepare a bank reconciliation. 2. Journalize the necessary entries. 3. If a balance sheet were prepared for Stone Systems on July 31, 20Y5, what amount should be reported as cash?

BuyFind

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663
BuyFind

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663

Solutions

Chapter
Section
Chapter 7, Problem 3PB
Textbook Problem

Bank reconciliation and entries

The cash account for Stone Systems at July 31, 20Y5, indicated a balance of $17,750. The bank statement indicated a balance of $33,650 on July 31, 20Y5. Comparing the bank statement and the accompanying canceled checks and memos with the records reveals the following reconciling items:

  1. A. Checks outstanding totaled $17,865.
  2. B. A deposit of $9,150, representing receipts of July 31, had been made too late to appear on the bank statement.
  3. C. The bank had collected $6,095 on a note left for collection. The face of the note was $5,750.
  4. D. A check for $390 returned with the statement had been incorrectly recorded by Stone Systems as $930. The check was for the payment of an obligation to Holland Co. for the purchase of office supplies on account.
  5. E. A check drawn for $1,810 had been incorrectly charged by the bank as $1,180.
  6. F.  Bank service charges for July amounted to $80.

Instructions

  1. 1. Prepare a bank reconciliation.
  2. 2. Journalize the necessary entries.
  3. 3. If a balance sheet were prepared for Stone Systems on July 31, 20Y5, what amount should be reported as cash?

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Chapter 7 Solutions

Financial And Managerial Accounting
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