On June 30, ANB Holdings Inc. showed a cash balance on their books of $10,788. The bank
Question:
On June 30, ANB Holdings Inc. showed a cash balance on their books of $10,788. The bank statement from the company’s bank showed a month end balance of $14,146. On reviewing the bank statement, the following items were discovered:
1. | | A deposit made on June 29 for $1,600 did not appear on the bank statement. |
2. | | Cheques written in the month of June but that did not appear on the bank statement were as follows: |
Cheque # 159 | | $1,330 |
Cheque # 160 | | 27 |
Cheque # 168 | | 208 |
Cheque # 170 | | 300 |
Cheque # 171 | | 1,130 |
3. | | The bank credited ANB Holdings Inc. account for $320 on June 19. This deposit did not belong to ANB,but belonged to another company and was posted in error. |
4. | | The bank statement showed receipt of a wire transfer of $2,160 in payment of a note receivable, as well as $120 interest. |
5. | | According to the bank statement, $27 was deducted from ANB account for service charges. |
6. | | The bank cleared cheque # 152 for $950; however, the cheque was recorded in ANB’s records at $930. Research showed the bank was correct, and the cheque was recorded incorrectly in ANB’s books. The cheque was written in payment of supplies expense. |
7. | | A cheque for $590 from one of ANB’s customers was rejected by the bank due to insufficient funds (NSF). |
Required:
a) Prepare a bank reconciliation to the correct cash balance at June 30.
b) Prepare journal entries required to adjust the cash account at June 30.
Financial Accounting: A Business Process Approach
ISBN: 978-0136115274
3rd edition
Authors: Jane L. Reimers