E5-8 Prepare bank reconciliation and adjustments.

The following information pertains to Lance Company.

1.

Cash balance per bank, July 31, $7,328.

2.

July bank service charge not recorded by the depositor $38.

3.

Cash balance per books, July 31, $7,364.

4.

Deposits in transit, July 31, $2,700.

5.

$2,016 collected for Lance Company in July by the bank through electronic funds transfer.

The collection has not been recorded by Lance Company.

6.

Outstanding checks, July 31, $686.

Instructions

(a)

Prepare a bank reconciliation at July 31, 2017.

(b)

Prepare a tabular analysis for the adjustments at July 31 on the books of Lance

Company. Use the following column headings: Cash, Accounts Receivable, Revenues,

and Expenses. Include margin explanations for the changes in revenues and expenses.

NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .

(a)

LANCE COMPANY

Bank Reconciliation

July 31, 2017

Cash balance per bank statement

Value

Add: Deposits in transit

Value

?

Less: Outstanding checks

Value

Adjusted cash balance per bank

?

Cash balance per books

Value

Add: Collection of note receivable

Value

?

Less: Bank service charge

Value

Adjusted cash balance per books

?

Stockholders' Equity

(b)

Assets

=

Liabilities

+

Account

Cash +

Accts. Rec.

=

+ Revenues

-Expenses

July 31

Value

Value

31

Value

Value

Text

After you have completed E5-8, consider the following additonal question.

1.

Assume that deposit in transit, outstanding checks and cash balance per books changed to

$3,600, $886 and $8,064 respectively. Show the impact of these changes on the bank

reconciliation.

SOLVE FOR MISSING VALUES , CASH , LIABILITIES, STOCK HOLDERS EQUITY AND QUESTION 1