College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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Chapter 7, Problem 1CP
1.
To determine
Prepare necessary
2.
To determine
Prepare necessary journal entry that makes the Bank L’s books as of June to be correct.
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Question: The following errors were found when the controller at Mountain Motel was doing the June 30 bank reconciliation.
On June 25, the bank posted a cheque in the amount of $825 to Mountain’s bank account. The cheque had been written by another company, Mountainside Company.
For each of these errors, (a) indicate if and how it would be shown on the bank reconciliation, and (b) prepare the journal entry for Mountain if required.
Please explain for the answer.
Kay Breeze receives the March bank statement for success systems on April 11, 2005. The March 31 bank statement shows and ending cash balance of $77,354. A comparison of the bank statement with the general ledger Cash account, No. 101, reveals the following:
Breeze notices that the bank erroneously cleared a $500 check against her account that she did not issue. The check documentation included with the bank statement shows that this check was actually issued by a company named Sierra Systems.
On March 25, the bank issues a $50 debit memorandum for the safety deposit box that Success Systems agreed to rent from the bank beginning March 25.
On March 26, the bank issues a $102 debit memorandum for printed checks that Success Systems ordered from the bank.
On March 31, the bank issues a credit memorandum for $33 interest-earned on Success Systems checking account for the month of March.
Breeze notices that the check she issued for $128 on March 31, 2005, has not yet cleared the bank.…
In comparing the canceled checks on the bank statement with the entries in the accounting records, Tanner Company found that check number 4239 for May's rent was correctly written and drawn for $6,750 but was erroneously entered in the accounting records as $6,570. When preparing the May bank reconciliation, the Tanner Company should: Select one: A. Add $180 to the book balance of cash B. Deduct $180 from the bank statement balance C. Add $180 to the bank statement balance D. Deduct $180 from the book balance of cash
Chapter 7 Solutions
College Accounting, Chapters 1-27
Ch. 7 - Prob. 1TFCh. 7 - Prob. 2TFCh. 7 - Prob. 3TFCh. 7 - Prob. 4TFCh. 7 - Prob. 5TFCh. 7 - Prob. 1MCCh. 7 - Prob. 2MCCh. 7 - Prob. 3MCCh. 7 - Prob. 4MCCh. 7 - When the cash short and over account has a debit...
Ch. 7 - Match the following words with their definitions...Ch. 7 - Prob. 2CECh. 7 - Prob. 3CECh. 7 - Prob. 4CECh. 7 - Why must a signature card be filled out and signed...Ch. 7 - Prob. 2RQCh. 7 - Prob. 3RQCh. 7 - Prob. 4RQCh. 7 - What are the most common reasons for differences...Ch. 7 - Prob. 6RQCh. 7 - Prob. 7RQCh. 7 - Name five common uses of electronic funds...Ch. 7 - Prob. 9RQCh. 7 - What should be prepared every time a petty cash...Ch. 7 - At what two times should the petty cash fund be...Ch. 7 - Prob. 12RQCh. 7 - At what two times would an entry be made affecting...Ch. 7 - What does a debit balance in the cash short and...Ch. 7 - CHECKING ACCOUNT TERMS Match the following words...Ch. 7 - Prob. 2SEACh. 7 - Prob. 3SEACh. 7 - Prob. 4SEACh. 7 - Prob. 5SEACh. 7 - Prob. 6SEACh. 7 - CASH SHORT AND OVER ENTRIES Based on the following...Ch. 7 - Prob. 8SPACh. 7 - Prob. 9SPACh. 7 - Prob. 10SPACh. 7 - Prob. 11SPACh. 7 - CHECKING ACCOUNT TERMS Match the following words...Ch. 7 - Prob. 2SEBCh. 7 - Prob. 3SEBCh. 7 - Prob. 4SEBCh. 7 - Prob. 5SEBCh. 7 - Prob. 6SEBCh. 7 - CASH SHORT AND OVER ENTRIES Based on the following...Ch. 7 - Prob. 8SPBCh. 7 - Prob. 9SPBCh. 7 - Prob. 10SPBCh. 7 - CASH SHORT AND OVER ENTRIES Listed below are the...Ch. 7 - Prob. 1MYWCh. 7 - Prob. 1MPCh. 7 - Prob. 1CP
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- The bank reconciliation revealed that one deposit had cleared the bank two weeks after the date of the deposit. Should this be of concern? Why, or why not?arrow_forwardprepare journal entries for this The following errors were found when the controller at Crane Hotel was doing the March 31 bank reconciliation. 1. 2. 3. On March 5, Crane recorded a payment of an account payable as $2,710. The correct amount was $1,270. It was correctly recorded by the bank. On March 19, Crane recorded a deposit as $2,820. The correct amount was $4,280. The deposit was for the collection of an account receivable and the bank recorded it correctly. On March 31, the bank recorded a deposit as $5,610. The correct amount was $2,650. This error was corrected by the bank on April 1. Crane had correctly recorded the deposit. For each of these errors indicate if and how it would be shown on the bank reconciliation. 1. 2. 3. $ $ +Aarrow_forwardMelissa Jackson, bookkeeper for Kinko Company, cannot prepare a bank reconciliation. The bank statement showed a $3,248.87 balance. Melissa's checkbook showed a $3,420.12 balance. Melissa placed a $522.80 deposit in the bank's night depository on June 30. The deposit did not appear on the bank statement. The bank included two DMs and one CM with the returned checks: $887.05 DM for NSF check, $13.60 DM for service charges, and $488.30 CM (less $18.00 collection fee) for collecting a $488.30 non-interest-bearing note. Check No. 811 for $143.10 and check No. 912 for $109.50, both written and recorded on June 28, were not with the returned checks. The bookkeeper had correctly written check No. 884, $1,310.00, for a new cash register, but she recorded the check as $1,472.00. The May bank reconciliation showed check No. 748 for $367.30 and check No. 710 for $251.30 as outstanding. The June bank statement included check No. 710 but not check No. 748. Complete the June 30, 2015,…arrow_forward
- Melissa Jackson, bookkeeper for Kinko Company, cannot prepare a bank reconciliation. The bank statement showed a $3,567.87 balance. Melissa's checkbook showed a $3,687.12 balance. Melissa placed a $559.80 deposit in the bank's night depository on June 30. The deposit did not appear on the bank statement. The bank included two DMs and one CM with the returned checks: $736.45 DM for NSF check, $10.40 DM for service charges, and $429.90 CM (less $14.00 collection fee) for collecting a $429.90 non-interest-bearing note. Check No. 811 for $178.70 and check No. 912 for $172.30, both written and recorded on June 28, were not with the returned checks. The bookkeeper had correctly written check No. 884, $1,325.00, for a new cash register, but she recorded the check as $1,440.00. The May bank reconciliation showed check No. 748 for $305.50 and check No. 710 for $223.60 as outstanding. The June bank statement included check No. 710 but not check No. 748. Complete the June 30, 2015,…arrow_forwardMelissa Jackson, bookkeeper for Kinko Company, cannot prepare a bank reconciliation. From the following facts, can you help her complete the June 30, 2020, reconciliation? The bank statement showed a $2,955.82 balance. Melissa's checkbook showed a $3,301.82 balance. Melissa placed a S510.19 deposit in the bank's night depository on June 30. The deposit did not appear on the bank statement. The bank included two DMs and one CM with the returned checks: $690.65 DM for NSF check. $8.50 DM for service charges, and $400.00 CM (less $10 collection fee) for collecting a $400.00 non-interest-bearing note. Check No. 811 for $110.94 and check No. 912 for $82.50, both written and recorded on June 28, were not with the returned checks. The bookkeeper had correctly written check No. 884. $1,000, for a new cash register, but she recorded the check as $1,069. The May bank reconciliation showed check No. 748 for $210.90 and check No. 710 for $195.80 outstanding on April 30. The June bank statement…arrow_forwardWhile preparing the February 28 bank reconciliation, the accountant identifies the following items: company’s balance according to the general ledger, $23,100; outstanding cheques, $550; interest earned on the chequing account, $100; a customer’s NSF cheque returned by the bank, $1,000. While preparing the reconciliation, the accountant discovers an error in recording a customer’s cheque; the amount has been incorrectly recorded on the books as a cash receipt of $600, while the bank correctly has recorded the amount as $650. What is the company’s adjusted cash balance on February 28? $22,250 $22,200 $22,150 $21,700arrow_forward
- The following errors were found when the controller at Crane Hotel was doing the March 31 bank reconciliation. 1. 2. 3. On March 5, Crane recorded a payment of an account payable as $2,710. The correct amount was $1,270. It was correctly recorded by the bank. On March 19, Crane recorded a deposit as $2,820. The correct amount was $4,280. The deposit was for the collection of an account receivable and the bank recorded it correctly. On March 31, the bank recorded a deposit as $5,610. The correct amount was $2,650. This error was corrected by the bank on April 1. Crane had correctly recorded the deposit. For each of these errors indicate if and how it would be shown on the bank reconciliation. 1. 2. 3. $ $ $arrow_forwardFlores Company received a bank statement showing a balance of $13,000 on November 30, 20X1. During the bank reconciliation process, Flores Company's accountant noted the following bank errors: 1. A check for $153 issued by Flora, Ic., was mistakenly charged to Flores Company's account. 2. Check 2782 was written for $100 but was paid by the bank as $1,100. 3. Check 2920 for $87 was paid by the bank twice. 4. A deposit for $570 on November 22 was credited by the bank for $750. Required: Assuming outstanding checks total $2170, prepare the adjusted bank balance section of the November 30, 20X1 bank reconciliation.arrow_forwardIn preparing the June 30th bank reconciliation, the accountant identified the following items: Company's checkbook balance $23,000, Outstanding Checks $550, Interest earned on the checking account $100, Customer's NSF (non sufficient funds) check returned by the bank $1,000. In the process of preparing the reconciliation, the accountant discovered an error in recording a customer's check; the amount was incorrectly recorded on the books as a cash receipt of $600, while the bank correctly recorded the amount as $650. What is the company's adjusted cash balance on June 30th? A. $21,700 B. $22,150 C. $22,250 D. $22,200arrow_forward
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