Rental Center’s ending cash balance per the general ledger, for October was $9,019.37. The owner deposited $1,000.66 on October 31 that did not appear on the bank statement. The bank collected a note with interest that totaled $500, of which $25 was interest, for Rental Center and charged the company $15 for the service. The ending balance on the bank statement for October was $8,870.83. After comparing the company’s records with the bank statement, checks totaling $481.12 were found to be outstanding. Besides the collection fee, there was $45 in other service charges. Also, the statement showed that Rental Center earned $112.75 in interest revenue on the account and that checks amounting to $109.75 turned out to be NSF. Finally, an error in recording was discovered: Check 6715 for $419.63 was paid to one of Rental Center’s vendors. The bank incorrectly deducted $491.63 from Rental Center’s account, referencing Check 6715.

1. Prepare a bank reconciliation at October 31.
2. Prepare the necessary adjustments to the accounting equation to update the records of Rental Center.
3. On which financial statements and in which sections would Rental Center report its true cash balance?

  • CreatedSeptember 01, 2014
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