Question
Chapter 4 Critical Thinking Case 2 Reconciling the Campbells' Checking Account Caleb and Eva Campbell are college students who opened their first joint checking account
Chapter 4 Critical Thinking Case 2 Reconciling the Campbells' Checking Account
Caleb and Eva Campbell are college students who opened their first joint checking account at the American Bank on September 14, 2015. They've just received their first bank statement for the period ending October 5, 2015. The statement and checkbook ledger are shown in the table below.
CALEB & EVA CAMPBELL 2128 E. ARBOR ST. DENVER, COLORADO | THE AMERICAN BANK 800-000-0000 STATEMENT PERIOD SEPT. 6 - OCT. 5, 2015 | ||||
Opening Balance | Total Deposits for Period | Total Checks/ Withdrawals for Period | Ending Balance | ||
$0.00 | $569.25 | $473.86 | $95.39 | ||
Date | Withdrawals (Debits) | Deposits (Credits) | Balance | ||
Sept. 14 | $360.00 | $360.00 | |||
Sept. 15 | 97.00 | 457.00 | |||
Sept. 25 | $45.20 | 9.25 | 421.05 | ||
Oct. 1 | 103.00 | 524.05 | |||
Oct. 1 | 3.00 BC | 521.05 | |||
Oct. 4 | 65.90 | $49.76 | $45.00 | $360.39 | |
Oct. 5 | 265.00 | 95.39 | |||
RT=Returned Check | DM=Debit Memo | BC=Bank Charges | |||
FC=Finance Charges | CM=Credit Memo |
Checkbook Ledger | ||||||
Check Number | Date 2015 | Details | 3 | Check Amount | Deposit Amount | Account Balance |
- | Sept. 14 | Cash-gift from birthday | $360.00 | $360.00 | ||
- | Sept. 15 | Caleb's wages | 97.00 | 457.00 | ||
101 | Sept. 24 | Kroger's-groceries | $45.20 | 411.80 | ||
102 | Sept. 27 | Telephone bill | 28.56 | 383.24 | ||
- | Oct. 1 | Caleb's wages | 103.00 | 486.24 | ||
103 | Oct. 1 | Univ. Bk. Sto.-college books | 65.90 | 420.34 | ||
104 | Oct. 1 | Walmart-sewing material | 16.32 | 404.02 | ||
105 | Oct. 1 | B. Hadley-apartment rent | 265.00 | 139.02 | ||
106 | Oct. 2 | Anthem-health insurance | 17.95 | 121.07 | ||
107 | Oct. 3 | Kroger's-groceries | 49.76 | 71.31 | ||
108 | Oct. 4 | Cash: gas, entertain., laundry | 45.00 | 26.31 | ||
- | Oct. 5 | Eva's salary | $449.09 | $475.40 |
From this information, prepare a bank reconciliation for the Campbells as of October 5, 2015, using a form like the one in Worksheet 4.1. Enter all answers as positive values. Leave no cell blank, enter "0" wherever required. Round the answers to the nearest cent. Enter your answers in the given order of Check numbers.
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Given the new checkbook balance calculated under Question 1, determine the net adjustment, if any, adjustments will the Campbells need to make in their checkbook ledger. Enter the answers as positive value. Round the answer to the nearest cent. $
If the Campbells earned interest on their idle balances because the account is a money market deposit account, what impact would this have on the reconciliation process? The effect of the interest earnings would have been a(n) in both bank and checkbook balances. Explain.
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