Question

Exercise 7-15 On August 31, 2021, Sheridan Company had a cash balance per its books of...

Exercise 7-15

On August 31, 2021, Sheridan Company had a cash balance per its books of $26,660. The bank statement on that date showed a balance of $17,760. A comparison of the bank statement with the Cash account revealed the following.
1. The August 31 deposit of $17,050 was not included on the August bank statement.
2. The bank statement shows that Sheridan received EFT deposits from customers on account totalling $2,420 in August. Sheridan has not recorded any of these amounts.
3. Cheque #673 for $1,320 was outstanding on July 31. It did not clear the bank account in August. All of the cheques written in August have cleared the bank by August 31, except for cheque #710 for $2,600, and #712 for $2,010.
4. The bank statement showed on August 29 an NSF charge of $139 for a cheque issued by R. Dubai, a customer, in payment of their account. This amount included an $8 service charge by Sheridan’s bank. The company’s policy is to pass on all NSF service charges to the customer.
5. Bank service charges of $25 were included on the August statement.
6. The bank recorded cheque #705 for $115 as $151. The cheque had been issued to pay for freight out on a sale. Sheridan had correctly recorded the cheque.

Prepare a bank reconciliation at August 31. (List items that increase balance as per bank & books first.)

SHERIDAN COMPANY
Bank Reconciliation
August 31, 2021
select an opening name for section one

Adjusted cash balance per bankDeposits in transitOutstanding cheque # 712Cash balance per bank statementEFT deposits of Accounts ReceivableBank service chargeNSF chequeError Cheque # 705Outstanding cheque # 673Error Cheque # 710Outstanding cheque # 710EFT deposits of Accounts Payable

$enter a dollar amount
select between addition and deduction

AddLess

:
select a reconciling item

    Error Cheque # 710    Error Cheque # 705    EFT deposits of Accounts Payable    EFT deposits of Accounts Receivable    Cash balance per bank statement    Adjusted cash balance per bank    Outstanding cheque # 712    Deposits in transit    Outstanding cheque # 673    Outstanding cheque # 710    Bank service charge    NSF cheque    

$enter a dollar amount
select a reconciling item

    NSF cheque    Error Cheque # 710    Outstanding cheque # 673    EFT deposits of Accounts Receivable    Bank service charge    Cash balance per bank statement    Error Cheque # 705    Outstanding cheque # 710    Deposits in transit    EFT deposits of Accounts Payable    Adjusted cash balance per bank    Outstanding cheque # 712    

enter a dollar amount
enter a subtotal of the two previous amounts
enter a total amount for the first part
select between addition and deduction

AddLess

:
select a reconciling item

    Deposits in transit    Outstanding cheque # 673    EFT deposits of Accounts Receivable    Bank service charge    Error Cheque # 705    Outstanding cheque # 712    Outstanding cheque # 710    Error Cheque # 710    NSF cheque    EFT deposits of Accounts Payable    Adjusted cash balance per bank    Cash balance per bank statement    

$enter a dollar amount
select a reconciling item

    NSF cheque    EFT deposits of Accounts Receivable    Outstanding cheque # 673    Cash balance per bank statement    Outstanding cheque # 712    Deposits in transit    Bank service charge    Error Cheque # 710    Outstanding cheque # 710    Adjusted cash balance per bank    Error Cheque # 705    EFT deposits of Accounts Payable    

enter a dollar amount
select a reconciling item

    EFT deposits of Accounts Receivable    Bank service charge    NSF cheque    Error Cheque # 710    Deposits in transit    EFT deposits of Accounts Payable    Adjusted cash balance per bank    Outstanding cheque # 710    Cash balance per bank statement    Error Cheque # 705    Outstanding cheque # 673    Outstanding cheque # 712    

enter a dollar amount
enter a subtotal of the three previous amounts
select a closing name for section one

Error Cheque # 705NSF chequeBank service chargeAdjusted cash balance per bankEFT deposits of Accounts ReceivableError Cheque # 710Outstanding cheque # 710EFT deposits of Accounts PayableDeposits in transitCash balance per bank statementOutstanding cheque # 673Outstanding cheque # 712

$enter a total amount for section one
select an opening name for section two

Adjusted cash balance per booksNSF chequeError Cheque # 710EFT deposits of Accounts ReceivableOutstanding cheque # 673Cash balance per booksEFT deposits of Accounts PayableError Cheque # 705Outstanding cheque # 710Deposits in transitOutstanding cheque # 712Bank service charge

$enter a dollar amount
select between addition and deduction

AddLess

: select a reconciling item

Error Cheque # 705Cash balance per booksOutstanding cheque # 712Deposits in transitNSF chequeOutstanding cheque # 673Outstanding cheque # 710EFT deposits of Accounts ReceivableBank service chargeError Cheque # 710EFT deposits of Accounts PayableAdjusted cash balance per books

enter a dollar amount
enter a subtotal of the two previous amounts
select between addition and deduction

AddLess

:
select a reconciling item

    Adjusted cash balance per books    Outstanding cheque # 712    Outstanding cheque # 710    Cash balance per books    EFT deposits of Accounts Receivable    EFT deposits of Accounts Payable    Bank service charge    NSF cheque    Error Cheque # 710    Error Cheque # 705    Deposits in transit    Outstanding cheque # 673    

$enter a dollar amount
select a reconciling item

    EFT deposits of Accounts Payable    Adjusted cash balance per books    Bank service charge    Outstanding cheque # 712    Error Cheque # 705    Cash balance per books    EFT deposits of Accounts Receivable    Deposits in transit    Outstanding cheque # 673    Outstanding cheque # 710    NSF cheque    Error Cheque # 710    

enter a dollar amount
enter a subtotal of the two previous amounts
select a closing name for section two

Outstanding cheque # 712Error Cheque # 705EFT deposits of Accounts PayableOutstanding cheque # 710Deposits in transitOutstanding cheque # 673Error Cheque # 710Adjusted cash balance per booksCash balance per booksEFT deposits of Accounts ReceivableBank service chargeNSF cheque

$enter a total amount for section two

Homework Answers

Answer #1

Solution:

Sheridan Company
Bank Reconciliation Statement
Aug-31
Balance as Per Bank Statement $17,760.00
Add:
Deposits in transit $17,050.00
Bank error in charging check #705 (151-115) $36.00
$17,086.00
$34,846.00
Less: Outstanding Checks
      Check #673 $1,320.00
      Check #710 $2,600.00
      Check #712 $2,010.00
$5,930.00
Adjusted Bank Balance $28,916.00
Balance as per books $26,660.00
Add: EFT deposit $2,420.00
$29,080.00
Less:
Bank Service charges $25.00
NSF Check $139.00
$164.00
Adjusted Balance per books $28,916.00
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