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.
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 |
Get Answers For Free
Most questions answered within 1 hours.