Question:
Heritage Furniture Company deposits all cash receipts each Wednesday and Friday in a night depository, after banking hours. The data required to reconcile the bank statement as of November 30 have been taken from various documents and records and are reproduced as follows.
The sources of the data are printed in capital letters. All checks were written for payments on account.
Instructions
1. Prepare a bank reconciliation as of November 30. If errors in recording deposits or checks are discovered, assume that the errors were made by the company. Assume that all deposits are from cash sales. All checks are written to satisfy accounts payable.
2. Journalize the necessary entries. The accounts have not been closed.
3. What is the amount of cash that should appear on the balance sheet as of November 30?
4. Assume that a canceled check for $580 has been incorrectly recorded by the bank as $850.
Briefly explain how the error would be included in a bank reconciliation and how it should becorrected.
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Transcribed Image Text:
NOVEMBER BANK STATEMENT PAGE1 MEMBER FDIC ACCOUNT NUMBER FROM 11/O1/20 TO 11/30/20- BALANCE AMERICAN NATIONAL BANK OF DETROIT DETROIT MI 48201-2500 (313)555-8547 7,447.20 8,691.77 7,345.91 9 DEPOSITS 20 WITHDRAWALS HERITAGE FURNITURE COMPANY 4 OTHER DEBITS AND CREDITS 2.298.7OCR NEW BALANCE 11,091.76 CHECKS AND OTHER DEBITS-DEPOSITS DATE-BALANCE-. No.T3 162.15 No.739 690.25 11/01 1,080.50 11/02 854.17 11/04 840.50 11/09 No.745 117.25 No.746 298.66 M8 2.500.00 11/09 11/09 896.61 11/11 882.95 11/16 11/18 11/28 11/25 11/28 11/30 No.738 251.40 No.740 237.50 No.741 495.15 No.742 501.90 No.744 506.88 7,723.90 8,506.35 8,363.47 8,023.79 10,109.88 9,143.83 9,464.32 9,429.31 10,472.35 10,473.35 11,418.06 11,126.16 11,091.76 60.55 No.743 671.30 No.748 450.90 No.749 640.13 M 125.00 No.750 276.77No.751 299.37 No.752 537.01 No.753 380.95 No.754 449.75 No.756 113.95 No.757407.95 1,606.74 897.34 942.71 No.760 486.39 NSF 291.90 80 34.40 ECERROR CORRECTION P8PAYMENT STOPPED 8C 8ERVICE CHARGE NSFNOT BUFFICIENT FUNDS THE RECONCILEMENT OF THI8 8TATEMENT WITH YOUR RECORDS邛B88ENTIAL. ANY ERROR OR EXCEPION SHOULD BE REPORTED IMMEDLATELY CASH ACCOUNT Balance as of November 1 $7,317.40 CASH RECEIPTS FOR MONTH OF NOVEMBER $8,651.58 DUPLICATE DEPOSIT TICKETS: Date and amount of each deposit in November Date Amount 1,080.50 854.17 840.50 Date Amount S 896.61 882.95 1,606.74 Date Amount Nov. 22 537.34 942.71 1,010.06 Nov. 1 oV 17 CHECKS WRITTEN: Number and amount of each check issued in November: Check No 740 741 742 743 744 745 746 Amount Check No. 747 748 749 750 751 752 753 Amount Check No. Amount $237.50 495.15 501.90 671.30 506.88 117.25 298.66 754 755 756 757 758 759 760 449.75 272.75 113.95 407.95 259.60 901.50 486.39 0 $450.90 640.13 276.77 299.37 337.01 380.95 Total amount of checks issued in November $8,105.66 BANK RECONCILIATION FOR PRECEDING MONTH: Heritage Furniture Company Bank Reconciliation October 31, 20- Cash balance according to bank statement Add deposit for October 31, not recorded by bank $7,447.20 690.25 $8,13745 Deduct outstanding checks: No. 731 736 $162.15 345.95 251.40 60.55 Adjusted balance Cash balance according to company's records Deduct service charges Adjusted balance 820.05 $7,317.40 7,352.50 35.10 $7,31740