Question
LMN Company has a June 30 year-end and maintains three bank accounts: City BankRegular, City BankPayroll, and Metro BankSpecial. Your analysis of cash disbursements records
LMN Company has a June 30 year-end and maintains three bank accounts: City BankRegular, City BankPayroll, and Metro BankSpecial. Your analysis of cash disbursements records for the period June 23 to July 6 reveals the following bank transfers:
You determine the following facts about each of the first five checks: (1) the date of the cash disbursements journal entry is the same as the date of the check, (2) the payee receives the check two days later, (3) the payee records and deposits the check on the day it is received, and (4) it takes five days for a deposited check to clear banking channels and be paid by the bank on which it is drawn. Check 3402 was not recorded as a disbursement until July 1. This check was picked up by the payee on the date it was issued, and it was included in the payees after-hours bank deposit on June 30.
Bank Accounts | Disbursement Date | Receipt Date | |||||
Check No. | From: | To: | Amount: | Per Books | Per Bank | Per Books | Per Bank |
2476 | Regular | Payroll | $ 100,000 | 6/23 | 6/30 | 6/25 | 6/25 |
2890 | Regular | Payroll | $ 200,000 | 6/25 | 7/2 | 6/27 | 6/27 |
3140 | Regular | Special | $ 100,000 | 6/28 | 7/5 | 6/30 | 6/30 |
A1006 | Special | Payroll | $ 50,000 | 6/29 | 7/6 | 7/1 | 7/1 |
A1245 | Special | Regular | $ 25,000 | 6/30 | 7/7 | 7/2 | 7/2 |
3402 | Regular | Special | $ 125,000 | 7/1 | 7/5 | 6/30 | 6/30 |
Prepare separate adjusting entries for any checks that require adjustment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
A | Bank Clearing | |
B | City Bank-Special Account | |
C | City Bank-Payroll Account | |
D | City Bank-Regular Account |
Account Titles and Explanation | Debit | Credit |
A, B, C, or D? | ? | ? |
A, B, C, or D? | ? | ? |
A, B, C, or D? | ? | ? |
A, B, C, or D? | ? | ? |
A, B, C, or D? | ? | ? |
A, B, C, or D? | ? | ? |
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