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Bank reconciliation and entries The cash account for Stone Systems at July 31 indicated a balance of $17,750. The bank statement indicated a balance of $33,650 on July 31. 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 $l,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. The accounts have not been closed. 3. If a balance sheet is prepared for Stone Systems on July 31, what amount should be reported as cash?

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 8, Problem 8.3BPR
Textbook Problem

Bank reconciliation and entries

The cash account for Stone Systems at July 31 indicated a balance of $17,750. The bank statement indicated a balance of $33,650 on July 31. 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 $l,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. The accounts have not been closed.
  3. 3. If a balance sheet is prepared for Stone Systems on July 31, what amount should be reported as cash?

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Chapter 8 Solutions

Accounting
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