Chapter $7$ Homework assignment take frame July $31,20Y5,$ indicated a balance $of$ $$8,165.$ The bank statement indicated a balance $of$ $$10,340on$ July $31,20Y5.$

bank statement and the accompanying canceled checks and memos with the records reveals the following reconciling items:

$a.$ Checks outstanding totaled $$3,720.$

$b.$ A deposit $of$ $$3,880,$ representing receipts $of$ July $31,$ had been made too late $to$ appear $on$ the bank statement.

$c.$ The bank had collected $$2,020on$ a note left for collection. The face $of$ the note was $$1,910.$

$d.$ A check for $$800$ returned with the statement had been incorrectly recorded $by$ Stone Systems $as$ $$880.$ The check was for the payment $ofan$ obligation $to$

for the purchase $of$ office supplies $on$ account.

$e.$ A check drawn for $$300$ had been incorrectly charged $by$ the bank $as$ $$30.$

$f.$ Bank service charges for July amounted $to$ $$35.$

Required:

Prepare a bank reconciliation.

Stone Systems

Bank Reconciliation

July $31,20Y5$

Adjustments: Set $up$ two sections: one for the company cash account section and the other for the bank balance section. Determine the effect $of$ the data $on$ each section.

Recall that when you are finished, the adjusted balances $in$ the bank and company sections $of$ the reconciliation must $be$ equal. $If$ not, $an$ item has been

overlooked $or$ treated $in$ error.

Recall that the company's cash account balance $is$ updated for any items $in$ the company section $of$ the bank reconciliation.

Journalize the necessary entries $(a.)$ that increase cash and $(b.)$ that decrease cash. The accounts have not been closed. $Ifan$ amount box does not require $an$ entry,

leave $it$ blank.

$20Y5$ July $31$

Accounts Payable$-$Holland $Co.$ Keep $in$ mind that the company needs $to$ journalize any adjusting items $in$ the company section $of$ the bank reconciliation, because these have not been

previously recorded $by$ the company. Debit memo items like bank service charges decrease Cash. Items that come from credit memos like collections $of$ note

interest $by$ the bank increase Cash. $If$ the company made $an$ error that overstates $or$ understates cash $in$ the company section, the journal adjustment would

decrease Cash $or$ increase Cash, respectively.

$If$ a balance sheet were prepared for Stone Systems $on$ July $31,20Y5,$ what amount should $be$ reported $as$ cash?

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