The president of Kostas Fashions Ltd., Joan Kostas, has just received the monthly bank statement for June,
Question:
a. A credit memorandum for the collection of a note for $ 2,080, including $ 80 of interest on the note. The bank charged the company a collection fee of $ 25.
b. A debit memorandum for an NSF cheque for $ 286 from customer Rami Cossette.
c. Total service charges for June amounting to $ 39. When comparing the bank statement with the company’s records, Peter discovered the following discrepancies:
d. A deposit of $ 1,145 was not recorded on the bank statement.
e. Three cheques had not been presented to the bank for payment yet. The amounts of these cheques are $ 1,573, $ 679, and $ 1,252.
f. A deposit of $ 2,340 was recorded incorrectly in the books at $ 2,430.
Required:
1. Explain to Joan why the two balances for cash are not equal, and why it is important to prepare a bank reconciliation statement.
2. Prepare a bank reconciliation statement at June 30 and the related journal entries.
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Related Book For
Financial Accounting
ISBN: 978-1259103285
5th Canadian edition
Authors: Robert Libby, Patricia Libby, Daniel Short, George Kanaan, M
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