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8-28 You have been asked to help the Rancher Company prepare its bank reconciliation. You examine the companys accounting re

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SOLUTION

1. Bank reconciliation statement

Particulars Amount ($)
Balance as per bank statement 3,783.04
Add : Deposits in transit 4,926.18
8,709.22
Less : Outstanding checks (518.65+699.95) (1,218.60)
Corrected Bank balance 7,490.62
Balance per books 7,753.24
Add : Interest Earned 25.18
7,778.42
Less: Check incorrectly recorded (647.21-627.41) (19.80)
Bank service charges (27.00)
NSF check (241.00)
Corrected Book balance 7,490.62

2. Journal entries

S.No. Accounts titles and Explanation Debit ($) Credit ($)
1. Cash 25.18
Interest Income 25.18
2. Utility Expenses 19.80
Cash 19.80
3. Service Charges 27.00
Cash 27.00
4. Accounts Receivable (NSF checks) 241.00
Cash 241.00

Ending balance in the Cash account = 7,490.62

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