Scribd Logo
Upload

Welcome to Scribd!

  • 308 views

    Ch. (8) : Bank Reconciliation Example:: Debit Memorandum: Credit Memorandum

    Uploaded by

    youssef walid
    The bank reconciliation for Poorten Company shows a correct cash balance of $13,622. This reconciles the adjusted cash balance per bank of $13,622 with the adjusted cash balance per books of $13,622. The adjustments include adding deposits in transit of $1,752 to the bank balance, subtracting outstanding checks of $2,410, and adjusting for errors such as an NSF check and a difference in recording a check amount. Journal entries are made on May 31 to record the collection of a note receivable by the bank and the required reconciling items.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd

    Ch. (8) : Bank Reconciliation Example:: Debit Memorandum: Credit Memorandum

    Uploaded by

    youssef walid
    308 views2 pages
    The bank reconciliation for Poorten Company shows a correct cash balance of $13,622. This reconciles the adjusted cash balance per bank of $13,622 with the adjusted cash balance per books of $13,622. The adjustments include adding deposits in transit of $1,752 to the bank balance, subtracting outstanding checks of $2,410, and adjusting for errors such as an NSF check and a difference in recording a check amount. Journal entries are made on May 31 to record the collection of a note receivable by the bank and the required reconciling items.

    Original Description:

    accounting

    Original Title

    Balance Per Bank Statement

    Copyright

    © © All Rights Reserved

    Available Formats

    DOC, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The bank reconciliation for Poorten Company shows a correct cash balance of $13,622. This reconciles the adjusted cash balance per bank of $13,622 with the adjusted cash balance per books of $13,622. The adjustments include adding deposits in transit of $1,752 to the bank balance, subtracting outstanding checks of $2,410, and adjusting for errors such as an NSF check and a difference in recording a check amount. Journal entries are made on May 31 to record the collection of a note receivable by the bank and the required reconciling items.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    308 views2 pages

    Ch. (8) : Bank Reconciliation Example:: Debit Memorandum: Credit Memorandum

    Uploaded by

    youssef walid
    The bank reconciliation for Poorten Company shows a correct cash balance of $13,622. This reconciles the adjusted cash balance per bank of $13,622 with the adjusted cash balance per books of $13,622. The adjustments include adding deposits in transit of $1,752 to the bank balance, subtracting outstanding checks of $2,410, and adjusting for errors such as an NSF check and a difference in recording a check amount. Journal entries are made on May 31 to record the collection of a note receivable by the bank and the required reconciling items.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    You are on page 1of 2

    Ch.

    (8): Bank Reconciliation


    Example: Poorten Company's bank statement for May 2012 shows the following data:
    Balance May 1 12,650 Balance May 31 14,280
    Debit memorandum: Credit memorandum:
    NSF check 175 collection of note receivable 505
    The cash balance per books at May 31 is 13,319. Your review of the data reveals the
    following:
    1. The NSF check was from Copple Co., a customer.
    2. The note collected by the bank was a 500, 3-month, 12٪ note. The bank charged a 10
    collection fee. No interest has been accrued.
    3. Outstanding checks at May 31 total 2,410.
    4. Deposits in transit at May 31 total 1,752.
    5. A Poorten Company check for 352, dated May 10, cleared the bank on May 25. The
    company recorded this check, which was a payment on account, for 325.
    Instructions:
    1. Prepare bank reconciliation at May 31.
    2. Journalize the entries required by the reconciliation.
    Answer:
    Cash balance per bank statement (end of period) $14,280
    Add: Deposit in transit (4) $1,752
    $16,032
    Less: Outstanding checks (3) 2,410
    Adjusted cash balance per bank $13,622

    Cash balance per books $13,319


    Add: Collection of note receivable 500, (2) 505
    Plus 15 interest, less collection fee10 13,824
    Less: NSF check (1) $175
    Error in recording check (5) 27 202
    Adjusted cash balance per books $13,622

    (b) :
    Date Explanation Debit Credit
    May 31 Cash 505
    Miscellaneous Expense 10
    Notes Receivable 500
    Interest Revenue 15
    (to record collection of note by bank)
    31 Accounts Receivable-Copple Co. 175
    Cash 175
    31 Accounts Payable 27
    Cash 27
    Summary:

    Cash balance per bank statement (end of period) $$$


    Add: Deposits in transit $$
    Bank errors that understate the bank statement balance $$ $$
    $$$
    Less: Outstanding checks $$
    Bank errors that overstate the bank statement balance $$ $$
    Correct cash balance $$$

    Cash balance per books (end of period) $$$


    Add: Bank credits and collections not yet recorded in the books $$
    Book errors that understate the book balance $$ $$
    $$$
    Less: Non sufficient funds checks (NSF) $$
    Bank charges not yet recorded in the books $$
    Book errors that overstate the book balance $$ $$
    Correct cash balance $$$

    Your assignment: EX. 8-11 (P. 348)

    You might also like