Question
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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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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