Question

са The following information pertains to Hughes Company as of May 31, 2018; 1. Balance per bank statement as of May 31, 2018, was $59,410. 2. Balance per Hughes Company's Cash account at May 31, 2018, was $60,904. 3. A late deposit of $4,275 on May 31 did not appear on the bank statement. 4. Outstanding checks as of May 31 totaled $7,614. 5. During May, the bank credited Hughes Company with the proceeds, $6,795, of a note that it had collected for the company. Interest revenue was $45 of the total. 6. Bank service and collection charges for May amounted to $18. 7. Comparison of the canceled checks with the check register revealed that one check in the amount of $1,458 had been recorded in the books as $1,539. The check had been issued in payment of an account payable. 8. A review of the deposit slips with the bank statement showed that a deposit for $2,250 of a company with a similar account number had been credited to the Hughes Company account in error. 9. A $270 check received from a customer, R. Petty, was returned with the bank statement marked NSF. 10. During May, the bank paid a $13,500 note of Hughes Company plus interest of $135 and charged it to the company's account per instructions received. Hughes Company had not recorded the payment of this note. 11. An examination of the cash receipts and the deposit tickets revealed that the bookkeeper erroneously recorded a check from a customer, C. Parker, of $1,458 as $1,944.

Answer 1

Solution Question No. a & b

Hughes & Company Bank Reconciliation Statement as on 31st May 2018 $ 59,410 $ 4,275 Balance as per Bank Statement Add:- Deposits in transit Less- Outstanding checks yet to be cleared by Bank Error of wrong credit by bank Adjusted cash balance $ $ 7,614 2,250 $ 53,821 $ 60,904 $ $ $ $ 6,750 45 81 450 Balance as per Huges & Company's Bank book Add: Collection by bank not accounted in bookds towards Note towards Interest revenue Error in preparing the check (1539-1458) interest received not accounted in Books Less - Bank collection charges for May 2018 Check returned by bank (NSF) Note paid not recorded in books Interest paid against the Note not recorded in books Error in accounting the receipt from customer (1944-1458) Adjusted cash balance 18 $ $ $ $ 270 13,500 135 486 $ 53.821 Credit Journal Entries Date Accounts Details Debit 31st May Cash $ 6,795 Note Interest received (Being the Note along with interest received now accounted in book) $ $ 6,750 45 31st May Cash 81 Accounts Payable (The check wrongly prepared for $ 1539 instead of $ 1458 being rectified) $ 81 $ 450 31st May Cash Interest received (interest received being accouned) $ 450 31st May Bank charges Cash (Being Bank charges paid) $ 18 $ 270 31st May Accounts Receivable Cash (Che return being accounted) 270 $ $ 13,500 135 31st May Note Interest paid Cash (being Note paid along with interest accounted) $ 13,635 $ 486 31st May Accounts Receivable Cash (being error in creating acconting customer receipt rectified) $ 486