Question

Saved 7 Rick Hall owns a card shop, Hall's Cards. The following cash information is available for the month of August. Year 3. As of August 31, the bank statement shows a balance of $12,895. The August 31 unadjusted balance in the Cash account of Hall's Cards is 59,089. A review of the bank statement revealed the following information 10 points 1. A deposit of $1,970 on August 31. Year 3, does not appear on the August bank statement 2. It was discovered that a check to pay for baseball cards was correctly written and paid by the bank for $3,425 but was recorded on the books as $4325 3. When checks written during the month were compared with those paid by the bank, three checks amounting to 54.130 were found to be outstanding 4. A debit memo for $54 was included in the bank statement for the purchase of a new supply of checks. eBook W Required Prepare a bank reconciliation at the end of August showing the true cash balance (Negative amounts should be indicated with minus sign.) HALL'S CARDS Bank Reconciliation August 31. Year 3 Unadtted Bank Balance August 31. Year 3 True Cash Balance August 31 Year 3 Unadjusted Book Balance Aug 31 Years The Cash Bac A 31 Years

Answer 1

Solution

Bank Reconciliation

Unadjusted Bank Balance, August 31 , Year 3 $ 12,895 Add : Deposit in transit $ 1,170 Less : Outstanding checks ($ 4,130) True Cash Balance , August 31 , Year 3 $ 9,935 Unadjusted Book Balance, August 31 , Year 3 $ 9,089 Add : Check overtstated ($ 4,325 - $ 3,425) $ 900 Less: Charges for new checks ($ 54 ) True Cash Balance, August 31 , Year 3 $ 9,935

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