Problem

Group AssignmentBank reconciliationsThe following cash and bank information is available f...

Group AssignmentBank reconciliations

The following cash and bank information is available for three companies at June 30, 2012.

Cash and Adjustment Information

Peach Co.

Apple Co.

Pear Co.

Unadjusted cash balance per books, 6/30

$45,620

$32,450

$23,467

Outstanding checks

1,345

2,478

2,540

Service charge

50

75

35

Balance per bank statement, 6/30

48,632

37,176

24,894

Credit memo for collection of notes receivable

4,500

5,600

3,800

NSF check

325

145

90

Deposits in transit

2,500

3,200

4,800

Credit memo for interest earned

42

68

12

Required

a. Organize the class into three sections and divide each section into groups of three to five students. Assign Peach Co. to section 1, Apple Co. to section 2, and Pear Co. to section 3.

Group Tasks

(1) Prepare a bank reconciliation for the company assigned to your group.

(2) Prepare any necessary journal entries for the company assigned to your group.

(3) Select a representative from a group in each section to put the bank reconciliation and required journal entries on the board.

Class Discussion:


b. Discuss the cause of the difference between the unadjusted cash balance and the ending balance for the bank statement. Also, discuss types of adjustment that are commonly made to the bank balance and types of adjustment that are commonly made to the unadjusted book balance.

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