August 2014 bank statement and cash T-account for Martha Company follow: No deposits were in transit and
Question:
No deposits were in transit and no cheques were outstanding at the end of July.
Required
1. Identify and list the deposits in transit at the end of August.
Put a check mark beside each item that appears on both the bank statement and what's already been recorded in the accounting records (shown in the T-account).
2. Identify and list the outstanding cheques at the end of August.
3. Prepare a bank reconciliation for August.
Any items in the accounting records without check marks should appear on the bank statement side of the bank reconciliation. Any items in the bank statement without check marks should appear on the company's books side of the bank reconciliation.
Up-to-date cash balance equals $20,290.
4. Give any journal entries that the company should make as a result of the bank reconciliation. Why are they necessary?
5. After the reconciliation journal entries are posted, what balance will be reflected in the Cash account in the ledger?
6. If the company also has $100 on hand, which is recorded in a different account called Cash on Hand, what total amount of Cash and Cash Equivalents should be reported on the August 31, 2014, balance sheet?
Step by Step Answer:
Fundamentals of Financial Accounting
ISBN: 978-1259103292
4th Canadian edition
Authors: Fred Phillips, Robert Libby, Patricia Libby, Brandy Mackintosh