In preparing the bank reconciliation at February 28, 20X1, for Awesome Dudes Moving Corporation, the following errors
Question:
In preparing the bank reconciliation at February 28, 20X1, for Awesome Dudes Moving Corporation, the following errors were discovered in the firm’s records:
a. The checkbook and the general journal indicated that Check 1301 dated February 18 was issued for $382 to pay for hauling expenses. However, examination of the canceled check and the listing on the bank statement showed that the actual amount of the check was $238.
b. The checkbook and the general journal indicated that Check 1322 dated February 24 was issued for $604 to pay a telephone bill. However, examination of the canceled check and the listing on the bank statement showed that the actual amount of the check was $640.
INSTRUCTIONS
1. Prepare the adjusted book balance section of the firm’s bank reconciliation statement. The book balance as of February 28, 20X1, was $19,661. The errors listed are the only two items that affect the book balance.
2. Prepare general journal entries to correct the errors. Date the entries February 28, 20X1. Use 1 as the journal page number. Check 1301 was debited to Hauling Expense on February 18 and Check 1322 was debited to Telephone Expense on February 24.
Analyze:
What net change to the Cash account occurred as a result of the correcting journal entries?
Step by Step Answer:
College Accounting A Contemporary Approach
ISBN: 9781260780352
5th Edition
Authors: David Haddock, John Price, Michael Farina