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Beeler Furniture Company deposits all cash receipts each Wednesday and Friday in a night depository, after banking hours. The data required to reconcile the bank

Beeler Furniture Company 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 June 30 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 June 1 $9,317.40
CASH RECEIPTS FOR MONTH OF JUNE $9,223.76

DUPLICATE DEPOSIT TICKETS: Date and amount of each deposit in June:

Date Amount Date Amount Date Amount
June 1 $1,080.50 June 10 $996.61 June 22 $897.34
3 854.17 15 882.95 24 947.21
8 840.50 17 1,606.74 30 1,117.74

CHECKS WRITTEN: Number and amount of each check issued in June:

Check No. Amount Check No. Amount Check No. Amount
740 $237.50 747 Void 754 $449.75
741 495.15 748 $450.90 755 272.75
742 501.90 749 640.13 756 113.95
743 761.30 750 276.77 757 407.95
744 506.88 751 299.37 758 259.60
745 117.25 752 537.01 759 901.50
746 298.66 753 380.95 760 486.39

Total amount of checks issued in June: $8,395.66

BANK RECONCILIATION FOR PRECEDING MONTH:

BEELER FURNITURE COMPANY

Bank Reconciliation

May 31, 2016

1

Cash balance according to bank statement

$9,447.20

2

Add deposit for May 31, not recorded by bank

690.25

3

$10,137.45

4

Deduct outstanding checks:

5

No. 731

$162.15

6

No. 736

345.95

7

No. 738

251.40

8

No. 739

60.55

820.05

9

Adjusted balance

$9,317.40

10

11

Cash balance according to companys records

$9,352.50

12

Deduct service charges

35.10

13

Adjusted balance

$9,317.40

JUNE BANK STATEMENT:

Click here to view.

Required:
1. Prepare a bank reconciliation as of June 30. 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. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. (Note: Deduct, Add, No., or colons (:) will automatically appear if required.)
2. Journalize the necessary entries. The accounts have not been closed. Refer to the Chart of Accounts for exact wording of account titles.
3. What is the amount of Cash that should appear on the balance sheet as of June 30?
4. Assume that a canceled check for $390 has been incorrectly recorded by the bank as $930. Briefly explain how the error would be included in a bank reconciliation and how it should be corrected.

Chart of Accounts

CHART OF ACCOUNTS
Beeler Furniture Company
General Ledger
ASSETS
110 Cash
111 Petty Cash
120 Accounts Receivable
131 Notes Receivable
141 Merchandise Inventory
145 Office Supplies
146 Store Supplies
151 Prepaid Insurance
181 Land
191 Office Equipment
192 Accumulated Depreciation-Office Equipment
193 Store Equipment
194 Accumulated Depreciation-Store Equipment
LIABILITIES
210 Accounts Payable
221 Notes Payable
222 Interest Payable
231 Salaries Payable
241 Sales Tax Payable
EQUITY
310 Owner, Capital
311 Owner, Drawing
312 Income Summary
REVENUE
410 Sales
610 Interest Revenue
EXPENSES
510 Cost of Merchandise Sold
515 Credit Card Expense
516 Cash Short and Over
520 Salaries Expense
531 Advertising Expense
532 Delivery Expense
533 Insurance Expense
534 Office Supplies Expense
535 Rent Expense
536 Repairs Expense
537 Selling Expenses
538 Store Supplies Expense
561 Depreciation Expense-Office Equipment
562 Depreciation Expense-Store Equipment
590 Miscellaneous Expense
710 Interest Expense

Labels and Amount Descriptions

Labels
Cash and cash equivalents
Outstanding checks
Proceeds of note collected by bank
Amount Descriptions
Adjusted balance
Check returned because of insufficient funds
Deposit of June (insert day), not recorded by bank
Error in recording Check No. (insert check number)
Error in recording June (insert day) deposit
Interest
Principal
Service charges
(Check numbers are valid Amount Descriptions;
No. will appear automatically)

Bank Reconciliation

1. Prepare a bank reconciliation as of June 30. 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. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. (Note:Deduct, Add, No., or colons (:) will automatically appear if required.)

BEELER FURNITURE COMPANY

Bank Reconciliation

June 30, 2016

1

Cash balance according to bank statement

2

3

4

5

6

7

8

9

10

11

Cash balance according to companys records

12

13

14

15

16

17

18

19

20

21

Journal

2. Journalize the necessary entries. The accounts have not been closed. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

DATE DESCRIPTION POST. REF. DEBIT CREDIT

1

2

3

4

5

6

7

8

Final Questions

3. What is the amount of Cash that should appear on the balance sheet as of June 30?

4. Assume that a canceled check for $390 has been incorrectly recorded by the bank as $930. Select how the error would be included in a bank reconciliation and how it should be corrected.

Treatment:

Deduction from cash per companys records

Deduction from cash per bank statement

Addition to cash per bank statement

Not included in a bank reconciliation

Addition to cash per companys records

To correct:

Journalize a correcting entry adding $930 to cash

Journalize an entry adding $540 to cash

Request that the bank correct the error

Deduct from the amount of bank service charges

Journalize an entry deducting $930 from cash

Journalize an entry deducting $540 from cash

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