Bank Reconciliation and Entries Sunshine Interiors deposits all cash receipts each Wednesday and Friday in a night depository, after banking hours. The data required to reconcile the bank statement as of July 31, 2010, have been taken from various documents and records and are reproduced as follows. The sources of the data are printed in capital letters. All checks were written for payments on account. CASH ACCOUNT: Balance as of July 1 CASH RECEIPTS FOR MONTH OF JULY $9,577.00 6,465.42 DUPLICATE DEPOSIT TICKETS: Date and amount of each deposit in July: Date Amount Date Amount Date Amount July 2 $569.50 July 12 $580.70 July 23 $713.45 5 701.80 16 600.10 26 601.50 9 819.24 19 701.26 31 1,177.87 CHECKS WRITTEN: Number and amount of each check issued in July: Check No. Amount Check No. Amount Check No. Amount 614 $243.50 621 $309.50 628 $837.70 615 350.10 622 Void 629 329.90 616 279.90 623 Void 630 882.80 617 395.50 624 707.01 631 1,081.56 618 435.40 625 158.63 632 325.40 619 320.10 626 550.03 633 310.08 620 238.87 627 391.73 534 241.71 Total amount of checks issued in July 58,389.42 BANK RECONCILIATION FOR PRECEDING MONTH: BANK RECONCILIATION FOR PRECEDING MONTH: Sunshine Interiors Bank Reconciliation $9,421.70 $780.80 ($310.10) June 30, 20YO Cash balance according to bank statement Add: Deposit of June 30 not recorded by bank Deduct: Outstanding Check No. 580 Outstanding Check No. 602 Outstanding Check No. 612 Outstanding Check No. 613 Total deductions (85.50) (92.50) (137.40) (625.50) Adjusted balance $9,577.00 $9,604.70 Cash balance according to company's records Deduct: Bank service charges (27.70) Adjusted balance $9,577.00 JULY BANK STATEMENT: MEMBER FDIC PAGE 1 AMERICAN NATIONAL BANK OF DETROIT ACCOUNT NUMBER FROM 7/01/20YO TO 7/31/20YO DETROIT, MI 48201-2500 (313) 933-8547 BALANCE 9,421.70 9 DEPOSITS 6,086.35 20 WITHDRAWALS 7,657.74 SUNSHINE INTERIORS 4 OTHER DEBITS AND CREDITS 3,754.00CR NEW BALANCE 11,604.31 NEW BALANCE 11,604.31 CHECKS AND OTHER DEBITS DEPOSITS DATE BALANCE No. 580 310.10 No. 612 92.50 780.80 07/01 9,799.90 No. 602 85.50 No. 614 243.50 569.50 07/03 10,040.40 No. 615 350.10 No. 616 279.90 701.80 07/06 10,112.20 No. 617 395.50 No. 618 435.40 819.24 07/11 10,100.54 No. 619 320.10 No. 620 238.87 580.70 07/13 10,122.27 No. 621 309.50 No. 624 707.01 MS 4,000.00 07/14 13,105.76 No. 625 158.63 No. 626 550.03 MS 160.00 07/14 12,557.10 No. 627 319.73 No. 629 329.90 600.10 07/17 12,507.57 No. 630882.80 No. 631 1,081.56 NSF 370.00 07/20 10,173.21 No. 632 325.40 No. 634 241.71 701.26 07/21 10,307.36 731.45 07/24 11,038.81 601.50 07/28 11,640.31 SC 36.00 07/31 11,604.31 EC -- ERROR CORRECTION OD OVERDRAFT MS MISCELLANEOUS PS PAYMENT STOPPED NSF -- NOT SUFFICIENT FUNDS SC -- SERVICE CHARGE THE RECONCILEMENT OF THIS STATEMENT WITH YOUR RECORDS IS ESSENTIAL. ANY ERROR OR EXCEPTION SHOULD BE REPORTED IMMEDIATELY. SC 36.00 07/31 11,604.31 EC -- ERROR CORRECTION OD OVERDRAFT MS - MISCELLANEOUS PS -- PAYMENT STOPPED NSF -- NOT SUFFICIENT FUNDS SC -- SERVICE CHARGE THE RECONCILEMENT OF THIS STATEMENT WITH YOUR RECORDS IS ESSENTIAL. ANY ERROR OR EXCEPTION SHOULD BE REPORTED IMMEDIATELY. Required: 1. Prepare a bank reconciliation as of July 31, 2010. If errors in recording deposits or checks are discovered, assume that the errors were made by the company. Assume that all deposits are from cash sales. All checks are written to satisfy accounts payable. When required, enter amounts in dollars and cents. Sunshine Interiors Bank Reconciliation July 31, 2040 Cash balance according to bank statement 11,601.41 X Add: Deposit in transit on July 31 1,177.87 Add: Outstanding Check no. 613 x 137.50 x Deduct: Outstanding Check No. 628 837.70 Deduct: Outstanding Check No. 633 310.08 Total deductions 1,285.28 X Adjusted balance 11,494.00 X Bank Reconciliation July 31, 2040 Cash balance according to bank statement Add: Deposit in transit on July 31 11,601.41 1,177.87 Add: Outstanding Check no. 613 x 137.50 X Deduct: Outstanding Check No. 628 837.70 Deduct: Outstanding Check No. 633 310.08 Total deductions 1.285.28 Adjusted balance 11.494.00 X Cash balance according to company's records Add: Note collected by bank, including $160.00 interest 7,664.00 160 X Add: Error in recording July 23 deposit 18 Add: Error in recording Check No. 627 63 Total additions Add: Check returned because of insufficient funds x 11,905 X 375 X Deduct: Bank service charges 36 Total deductions 411 Adjusted balance 11,494 X 2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. When required, enter amounts in dollars and cents. If an amount box does not require an entry, leave it blank. a. 20Y0 July 31 Cash 4,160 X Notes Receivable 4,000 Interest Revenue 160 Cash x Cash Short and Over X 18 b. July 31 Feedback 3. What is the amount of cash that should appear on the balance sheet as of July 31, 20YO? 11,494 S 4. Assume that a canceled check for $160 has been incorrectly recorded by the bank as $1,600. Select how the error would be included in a bank reconciliation and how it should be corrected. Treatment Deduction from cash per bank statement X To correct Journalize an entry deducting $1,600 from cash X