Question

Use the following information to prepare a bank reconciliation for Magee Company at August 31, 2016:...

Use the following information to prepare a bank reconciliation for Magee Company at August 31, 2016:

(1)

Cash account balance, $18,273.40.

(2)

Bank statement balance, August 31, $16,315.00.

(3)

Deposits in transit, $2,800.00.

(4)

Outstanding checks, August 31, $1,850.80.

(5)

Service charge on bank statement not recorded in books, $44.00.

(6)

Bank error—another company's check charged on Magee Company's bank statement, $245.20.

(7)

Check for repairs expense, $1,680.00, incorrectly recorded in books as $960.00.

(a) Prepare the bank reconciliation.

(b) Adjusting Journal Entries for cash on the book.                          

Homework Answers

Answer #1

Solution a:

Magee company
Aug-31
Cash balance according to Bank Statement $16,315.00
Add: Deposit in transit $2,800.00
Add: Bank error in charging another company's check $245.20
Total Additions $3,045.20
Deduct: Outstanding checks $1,850.80
Adjusted Balance $17,509.40
Cash balance according to Company's books $18,273.40
Deduct: Bank Service Charges $44.00
Deduct: Error in recording repair expense (1680-960) $720.00
Total deductions $764.00
Adjusted Balance $17,509.40

Solution b:

Date Particulars Debit Credit
31-Aug Repair expenses $720.00
       To Cash $720.00
31-Aug Miscellaneous expense $44.00
       To Cash $44.00
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2.   Use the following information to prepare a bank reconciliation for Magee Company at August 31, 2016:    (1)        Cash account balance, $18,273.40. (2)        Bank statement balance, August 31, $16,315.00. (3)        Deposits in transit, $2,800.00. (4)        Outstanding checks, August 31, $1,850.80. (5)        Service charge on bank statement not recorded in books, $44.00. (6)        Bank error - another company’s check charged on Magee Company’s bank statement, $245.20. (7)        Check for repairs expense, $1,680, incorrectly recorded in books as $960.00.
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