Question

Bank Reconciliation and Entries The cash account for Stone Systems at July 31, 2015, indicated a balance of $9,155. The bank statement indicated a balance of $11,610 on July 31, 20Y5. Comparing the bank statement and the accompanying canceled checks and memos records reveals the following reconciling items: a. Checks outstanding totaled $4,180. b. A deposit of $4,350, representing receipts of July 31, had been made too late to appear on the bank statement. c. The bank had collected $2,260 on a note left for collection. The face of the note was $2,150. d. A check for $400 returned with the statement had been incorrectly recorded by Stone Systems as $440. The check was for the payment of an obligation to Holland Co. for the purchase of office supplies on account. e. A check drawn for $400 had been incorrectly charged by the bank as $40. f. Bank service charges for July amounted to $35. Required: 1. Prepare a bank reconciliation. Stone Systems Bank Reconciliation July 31, 2045 Cash balance according to bank statement Total deductions Adjusted balance Cash balance according to company's records Adjustments: Total additions

Answer 1

		Bank Reconcilation
		July 31,2015
Cash balance According to bank statement					11,610
Deposit in transit					4,350
checks oustanding				4,180
Error in recording check				360
total deductions					4,540
Adjusted balance					11,420
Cash balance according to company's records					9,155
Adjustments:
note collection				2,260
error in recording check for payment				40
total addittions					2,300
Bank service charge					35
Adjusted balance					11,420
Journal Entries
2015	Cash			2,300
	Accounts payable				40
31-Jul	interest income				110
	note receivable				2150
	(in place of interest income use interest receivable if interest income
	option is not given)
31-Jul	Bank service charge			35
	cash				35
3)	amount to be reported			11,420