Question

Subject: Accounting Lesson preference: No preference Created: Jan. 21, 2018, 10:47 p.m. What would you like...

Subject:

Accounting

Lesson preference:

No preference

Created:

Jan. 21, 2018, 10:47 p.m.

What would you like help with?

Larkspur, Inc.’s bank statement from Main Street Bank at August 31, 2017, gives the following information. Balance, August 1 $18,525 Bank debit memorandum: August deposits 71,125 Safety deposit box fee $ 100 Checks cleared in August 68,603 Service charge 125 Bank credit memorandum: Balance, August 31 20,942 Interest earned 120 A summary of the Cash account in the ledger for August shows the following: balance, August 1, $18,825; receipts $74,125; disbursements $73,495; and balance, August 31, $19,455. Analysis reveals that the only reconciling items on the July 31 bank reconciliation were a deposit in transit for $4,875 and outstanding checks of $4,575. In addition, you determine that there was an error involving a company check drawn in August: A check for $400 to a creditor on account that cleared the bank in August was journalized and posted for $40. Journalize the adjusting entries to be made by Larkspur, Inc. at August 31. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Homework Answers

Answer #1

Adjustment Entry

Total Payment which had to be done to Creditor on Account = $400

Wrongly Entered and Journalize the Amount = $40

The balance amount to be adjusted to Creditors = 400 - already entered 40 = $360

Following Adjustment Entry is to be passed:

Debit: Accounts Payable $360

Credit: Cash $360

Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you

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