Question:
Rocky Mountain Interiors 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 July 31 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.
Instructions1. Prepare a bank reconciliation as of July 31. 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. Illustrate the effects on the accounts and financial statements of the bank reconciliation.3. What is the amount of Cash that should appear on the balance sheet as of July 31?4. Assume that a canceled check for $125 has been incorrectly recorded by the bank as $1,250. Briefly explain how the error would be included in a bank reconciliation and how it should becorrected.
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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:
BANK RECONCILIATION FOR PRECEDING MONTH (DATED JUNE 30): Cash balance according to bank statement Add deposit of June 30, not recorded by bank $ 9,422.80 780.80 $10,203.60 Deduct outstanding checks: No. 580 $310.10 No. 602 85.50 No. 612 92.50 No. 613 Adjusted balance 137.50 625.60 $ 9,578.00 $ 9,605.70 Cash balance according to company's records Deduct service charges 27.70 $ 9,578.00 Adjusted balance CASH ACCOUNT: Balance as of July 1 $ 9,578.00 CHECKS WRITTEN: Number and amount of each check issued in July: Check No. Check No. Amount Check No. Amount Amount $ 837.70 $309.50 614 $243.50 621 628 Void 615 350.10 622 629 329.90 Void 616 279.90 623 630 882.80 617 395.50 624 707.01 631 1,081.56 618 435.40 625 158.63 632 62.40 310.08 619 320.10 626 550.03 633 620 328.87 627 318.73 634 503.30 Total amount of checks issued in july $8,405.01 PAGE MEMBER FDIC ACCOUNT NUMBER AMERICAN NATIONAL BANK OF DETROIT TO 7/31/20- FROM 7/01/20- DETROIT, MI 48201-2500 (313)933-8547 BALANCE 9,422.80 9 DÉPOSITS 8,088.38 20 WITHDRAWALS 8,237.41 ROCKY MOUNTAIN INTERIORS 4 OTHER DERITS AND CREDITS 3,886.00OR NEW BALANCE 10,858.74 DEPOSITS -- DATE -- BALANCE-. CHEOKS AND OTHER DEBITS 02.B0 780.80 No.580 310.10 No,612 07/01 0,801.00 Nn.614 Be0.80 No.602 88.80 243.60 07/03 10,041.50 No.615 380.10 No.616 270.00 701.80 07/06 10,113.30 No.617 30B.60 No.618 435.40 819.24 07/11 10,101.64 No.610 320.10 No.620 238.87 B80.70 07/18 10,123.37 Ho.621 300.50 No. 824 707.01 MB 4,000.00 07/14 13,106.80 MS 180.00 Nn.626 No.625 188.63 БВ0.03 07/14 12,858.20 12,800.07 No.627 318.78 No.620 320.00 B00.10 07/17 No.830 882.80 No.831 1,081.56 NSF 480.00 07/20 10,006.31 No.028 837.70 No.633 310.08 701.26 07/21 0,648.79 731.48 07/24 10,380.24 601.80 07/28 10,081.74 28.00 07/31 10,056.74 OD - OVERDRAFT BO - ERROR CORRECTION PS - PAYMENT STOPPED S0 - SERVICE CHARGE MS - MISCELLANEOUS NSP - NOT SUFFICIENT FUNDS ... THE REOONOILEMENT OF THE STATEMENT WITH YOUR REOORDE IS ESSENTIAL ANY ERROR OR EXOEPTION CHOULD EE REPORTED IMMEDIATELY.
