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The cash account for Coreys Construction Company at August 31, 2018, indicated a book balance of $19,885. The bank statement received by the company indicated
The cash account for Coreys Construction Company at August 31, 2018, indicated a book balance of $19,885. The bank statement received by the company indicated a balance of $39,473.63 as at August 31, 2018. A comparison of the bank statement and the accompanying cancelled cheques and memos with the records revealed the following:
- A deposit of $6,794.62 was received by the bank on August 31 after the bank statement was prepared.
- Cheques #251 for $1,200 and #260 for $1,333.25 were not presented to the bank for encashment as at August 31, 2018.
- The bank erroneously debited a cheque drawn Coreys Construction as $16,000 instead of $1,600.
- The companys accountant recorded a $3,500.00 cheque for payment of accounts payables as $35,000
- The bank credited a deposit of $200 as $2,000 to Coreys Construction account.
- A cheque for $13,500 from a customer Ali Woods was returned for insufficient funds. The bank charged $50 for Woods NSF cheque. The companys policy states that the bank charges associated with NSF cheques are to be recovered from the customer.
- A note was collected by the bank of $21,000 on August 31 which included interest of $1,500.
- A debit memo from the bank showed service charge amounting to $2,500 as at August 31, 2018
Required:
1.Prepare the necessary journal entries for Coreys Construction Company at August 31, 2018.
2.Prepare Coreys Construction Company adjusted cash book for August 31st. 2018.
3.Prepare Coreys Construction Company bank reconciliation statement for August 31, 2018.
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