Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The bank statement for the checking account of Management Systems Inc. (MSI) showed a December 31, 2018, balance of $15,233.62. Information that might be useful

The bank statement for the checking account of Management Systems Inc. (MSI) showed a December 31, 2018, balance of $15,233.62. Information that might be useful in preparing a bank reconciliation is as follows: Outstanding checks were $1,381.15. The December 31, 2018, cash receipts of $605 were not deposited in the bank until January 2, 2019. One check written in payment of rent for $252 was correctly recorded by the bank but was recorded by MSI as a $265 disbursement. In accordance with prior authorization, the bank withdrew $510 directly from the checking account as payment on a mortgage note payable. The interest portion of that payment was $380. MSI has made no entry to record the automatic payment. Bank service charges of $20 were listed on the bank statement. A deposit of $905 was recorded by the bank on December 13, but it did not belong to MSI. The deposit should have been made to the checking account of MIS, Inc. The bank statement included a charge of $55 for an NSF check. The check was returned with the bank statement and the company will seek payment from the customer. MSI maintains a $260 petty cash fund that was appropriately reimbursed at the end of December. According to instructions from MSI on December 30, the bank withdrew $13,000 from the account and purchased U.S. Treasury bills for MSI. MSI recorded the transaction in its books on December 31 when it received notice from the bank. Half of the Treasury bills mature in two months and the other half in six months.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: John J. Wild, Ken W. Shaw

2010 Edition

9789813155497, 73379581, 9813155493, 978-0073379586

More Books

Students also viewed these Accounting questions