Question

Ace Lawn Care Module 4 Mini Practice Problem In June, Jim commented to you that he...

Ace Lawn Care Module 4 Mini Practice Problem

In June, Jim commented to you that he could never figure out his bank statement, “it never matches the balance in my accounting records” he tells you. So you explain that a bank reconciliation is a tool used to balance the bank statement to the accounting books. He gives you his bank statement for June 2014 (see Instructions below). The general ledger shows a balance for the account cash of $19,319.00 on June 30, 2014 (see detail transactions under instruction below). Jim’s business only has one checking account and no other cash accounts.

Instructions to answer these questions

Using the bank statement and the general ledger, prepare bank reconciliation for Ace Lawn Care as of June 30, 2014. Record the necessary journal entries to adjust the books for the appropriate reconciling items. Start with the journal entries first

Cash balance per bank statement
Adjusted cash balance per bank
Cash balance per books
Adjusted cash balance per books
GENERAL JOURNAL Page
DATE DESCRIPTION POST. REF. DEBIT CREDIT

Homework Answers

Answer #1

Cash balance as per bank statement

$19,234

Add: Deposit in transit

$425

$19,659

Less: Outstanding check (1574, 1576, 1577)

-$387

Less: EFT#44                

-$143

Adjusted cash balance as per bank

$19,129

Cash balance as per books

$19,319

Add: Interest earned

-$5.00

Less: NSF check

-$120

Less: Bank Service charge

-$35

Less: Error in recording check No 1570

-$40

Adjusted cash balance as per book

$19,129

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