Required Quetion 6.2 Preparation Of Bank reconciliation
A cheque from one of JB's customers in the amount of $1, 120 that had been deposited during the last of May was returned with the bank statement as NSF. Bank service charges for the month were $55. The company had written and mailed out cheques with a value of $4, 235 that had not yet cleared the bank. Cheque #791, which was a payment for advertising expenses of $230, was incorrectly recorded in the general ledger as $320. During the month, the bank collected a $2,000 note receivable plus the outstanding interest on behalf of JB. The note was interest-bearing at 5% per annum and had been outstanding for one year. The cash receipts for May 31 amounted to $1, 650 and had been deposited in the night drop slot at the bank on the evening of May 31. These were not reflected on the bank statement for May. Required. a. Prepare the bank reconciliation for JB at May 31, 2016. b. Prepare any journal entries necessary as a result of the bank reconciliation prepared in part "a". Infinity Emporium Company received the monthly statement for its bank account, showing a balance of $66, 744 on August 31. The balance in the Cash account in the company's accounting system at that date was $71, 952. The company's accountant reviewed the statement and the company's accounting records and noted the following. After comparing the cheques written by the company and those deducted from the bank account in August the accountant determined that all six cheques (totalling $6, 180) that had been outstanding at the end of July were processed by the bank in August. However, five cheques written in August, totalling $4, 560, were outstanding on August 31. A review of the deposits showed that a deposit made by the company on July 31 for $11, 532 was recorded by the bank on August 1, and an August 31 deposit of $12, 240 was recorded in the company's accounting system but had not yet been recorded also showed. The August bank statement also showed a service fee of $24. a customer's cheque In the amount of $204 that had been returned XSF. a bank loan payment of $900. which included interest of $130. that the bank had deducted automatically, and a customer's note for $3, 500 plus $100 interest on the note that the bank had collected for infinity Emporium and deposited in its account. Required: a. Prepare a bank reconciliation as at August 31. b. How much cash does infinity Emporium actually have available as at August 31? c. Explain how, he adjusted (corrected) balance of cash, as determined by the bank reconciliation could be higher than both the balance shown on the bank statement and the balance shown in the company's d. Prepare adjusting journal entries to record all the necessary adjustments to bring the Cash account to its correct balance
