Question

Exercise 7-12 Bank reconciliation LO6 CHECK FIGURE: Adjusted book balance = $11,090 Kesler Co. deposits all receipts intact on the day received and makes all payments by cheque. On July 31, 2020, after all posting was completed, its Cash account showed a $10,932 debit balance. However, Kesler's July 31 bank statement showed only $10,077 on deposit in the bank on that day along with the following information a. Outstanding cheques, $2,756. b. Included with the July cancelled cheques returned by the bank was a $30 debit memo for bank services. c. Cheque # 919, returned with the cancelled cheques, was correctly drawn for $236 in payment of the utility bill and was paid by the bank on July 15. However, it had been recorded with a debit to Utilities Expense and a credit to Cash as though it were for $326. d. The July 31 cash receipts, $3,671, were placed in the bank's night depository after banking hours on that date and were unrecorded by the bank at the time the July bank statement was prepared. Required a. Prepare a bank reconciliation for Kesler Co. at July 31 b. Give the journal entries that Kesler Co. should make as a result of having prepared the bank reconciliation in part (a) Analysis Component: Identify whether profit, assets, liabilities, and equity would be over- or understated if the journal entries in part (b) were not recorded. 512

Answer 1

Bank 19 Balance as her Book 10932 + +2756 - 30 w ( Qutstanding cheque not cleared by Bank (Benk has not made payment) Charges by Bank not accounted in Cash Book VH Wly Expense excess deducted inlash book to be added to arrive at Bank Balance] Receipt not accounted by Bank + 90 + (-) Demeine - 3671 Bal as bank at Statemat 10077

16 ) Bank charges ALC Dr. 30. o Banle (Being bank charges recorded in book) 30 - i Bank Al Dr. 90 - To Utility expenses ao - (Being utility Experes recorded at Correct amonuf) - Analysis & it Part (6) were not recorded, then Profit would be overstated by $30, Asseft would be overstated T (Bank Book) by $30.
Refer above image for answers. Adjusted Book balance of 11090 is not correct.