The cash receipts and the cash payments of Campbell Hardware for January 2014 are as follows: The
Question:
The cash receipts and the cash payments of Campbell Hardware for January 2014 are as follows:
The Cash account of Campbell Hardware shows a balance of $39,478 at January 31, 2014. Campbell Hardware received the bank statement shown on the next page on January 31, 2014.
Additional data for the bank reconciliation:
a. The EFT deposit was a receipt of monthly rent. The EFT debit was payment of monthly insurance.
b. The NSF cheque was received from B. Crawford.
c. The $12,744 bank collection of a note receivable on January 22 included $300 interest revenue.
d. The correct amount of cheque no. 313, a payment on account, is $12,436. (Campbell Hardware's accountant mistakenly recorded the cheque for $12,562.)
Required
1. Prepare the Campbell Hardware bank reconciliation at January 31, 2014.
2. Describe how a bank account and the bank reconciliation help Campbell Hardware's owner control the business's cash.
3. How would you handle items that were outstanding (bank side) from the previous month's bank reconciliation?
Step by Step Answer:
Accounting Volume 1
ISBN: 978-0132690096
9th Canadian edition
Authors: Charles T. Horngren, Walter T. Harrison, Jo Ann L. Johnston, Carol A. Meissner, Peter R. Norwood