Exercises:
PE 8-2A: Items on company’s bank statement
The following items may appear on a bank
statement:
1. EFT payment
2. Note collected for company
3. Bank correction of an error from recording a
$7,200 deposit as $2,700
4. Service charge
Indicate whether each item would appear as a
debit or credit memo on the bank statement and
whether the item would increase or decrease the
balance of the company’s account.
PE 8-2B: Items on company’s bank statement.
The following items may appear on a bank
statement:
1. EFT check
2. Bank correction of an error from posting
another customer’s check to the company’s
account.
3. Loan proceeds
4. EFT deposit
Indicate whether each item would appear as a
debit or credit memo on the bank statement and
whether the item would increase or decrease the
balance of the company’s account.
BE 8-3A: Bank reconciliation:
The following data were gathered to use in reconciling the
bank account of a company:
Balance per bank
Balance per company records
Bank service charges
Deposit in transit
NSF check
Outstanding checks
$25,500
$27,475
75
7,500
3,400
9,000
A) What is the adjusted balance on the bank
reconciliation?
B) Journalize any necessary entries for the company
based on the bank reconciliation.
BE 8-3B: Bank reconciliation:
The following data were gathered to use in reconciling
the bank account of a company:
Balance per bank
Balance per company records
Bank service charges
Deposit in transit
Note collected by bank with $360 interest
Outstanding checks
$17,400
$5,765
125
3,000
9,360
5,400
A) What is the adjusted balance on the bank
reconciliation?
B) Journalize any necessary entries for the company
based on the bank reconciliation.
PE 8-4A: Petty cash fund
Prepare journal entries for each of the
following:
a. Issued a check to establish a petty cash
fund of $800
b. The amount of cash in the petty cash fund
is $225. Issued a check to replenish the
fund, based on the following summary of
petty cash receipts: repair expense $450,
and miscellaneous selling expense $75.
Record any missing funds in the cash short
and over account.
PE 8-4B: Petty cash fund
Prepare journal entries for each of the
following:
a. Issued a check to establish a petty cash
fund of $750
b. The amount of cash in the petty cash fund
is $325. Issued a check to replenish the
fund, based on the following summary of
petty cash receipts: store supplies $300,
and miscellaneous selling expense $100.
Record any missing funds in the cash short
and over account.
EX 8-16 Bank reconciliation
Identify each of the following reconciling items:
(non of the transactions reported by bank debit
and credit memos have been recorded by the
company)
1) Bank service charges $120
2) Check of a customer returned by bank to
company because of insufficient funds 4,200
3) Check for $240 incorrectly recorded by the
company as $420
4) Check for $1000 incorrectly charged by bank
as $10,000
5) Deposit in transit $24,950
6) Outstanding checks $18,100
7) Note collected by bank $15,600
EX 8-18 Bank reconciliation
1) Cash balance according to the company’s
records at July 31, $15,600.
2) Cash balance according to the bank statement
at July 31, $16,230.
3) Checks outstanding, $3,180
4) Deposit in transit, not recorded by bank
$2,950
5) A check for $270 in payment of an account
was erroneously recorded in the check register
as $720
6) Bank debit memo for service charges, $50
a. Prepare a bank reconciliation
b. Must a bank reconciliation always balance
(reconcile)?
EX 8-22 Bank reconciliation Identify the errors in the following bank reconciliation
Alma Co.
Bank reconciliation for the month ended Nov 20 2012
Cash balance according to bank statement
$12,090
Add: outstanding checks:
No.915
$850
No.960
$615
No.964
$850
No.965
$775
$3,090 = $15,180
Deduct: deposit of Nov 30,not recorded by bank
$4000
Adjusted balance
$11,180
______________________________________________________________________
Cash balance according to company’s records
$4,430
Add: proceeds of note collected by bank: Principle
$5,000
Interest
$200
= $ 5,200
Service charges $30
= $ 5,230 = 9660
Deduct: Check returned because of insufficient funds
$1,100
Error in recording Nov 23 deposit of $6100 as $1600
$4500 = 5,600
Adjusted balance
$4,060