The December 31 bank statement for Miller Corporation showed a $2,040.75 balance

Question

The December 31 bank statement for Miller Corporation showed a $2,040.75 balance.
On this date, the company's Cash account reflected a $716.7 overdraft. In reconciling these amounts, the following information is discovered:

1. Cash on hand for undeposited sales receipts, December 31, $151.5.

2. Customer NSF check returned with bank statement, $407.7.

3. Cash sales of $604 for the week ended December 18 were recorded on the books. The cashier reports this amount missing, and it was not deposited in the bank.

4. Note receivable of $2,900 and interest of $29 collected by the bank and not recorded on the books.

5. Deposit in transit December 31, $370.

6. A customer check for $290.4 in payment of its account was recorded on the books at $940.2.

7. Outstanding checks, $2,011.45. Includes a duplicate check of $78.5 to C. Brown, who notified Miller that the original was lost. Miller stopped payment on the original check and has already adjusted the cash account in the accounting records for this amount.

Question

1. Prepare a December 31 bank reconciliation for Miller. When required, enter amounts to the nearest cent.

Bank Reconciliation

December 31, 2013

hint:

You should complete the following steps in a bank reconciliation:

Step 1: Compare the deposits listed in the company's records with the deposits shown on the bank statement

Step 2: Compare the checks listed in the company's records with the checks shown on the bank statement.

Step 3: Identify any deposits or charges made directly by the bank that are not included in the company's records.

Step 4: Determine the effect of any errors

Step 5: Complete the bank reconciliation.

2. Prepare any journal entries necessary by Miller to record the information from Requirement 1.

For a compound transaction, if required, round your answers to two decimal places.

Hint:

You should refer to the bank reconciliation completed in requirement (1) of this problem. The company only makes journal entries for the adjustments it made to its records on the bank reconciliation. It does not make journal entries for the adjustments it made to the bank statement balance on the reconciliation; the bank will record these adjustments in its accounts at the appropriate time.

Balance from bank statement $.......... Add: Deposit in transit $.......... Add: Cash on hand (Undeposited) $.......... $.......... $.......... Deduct: Outstanding checks $.......... Adjusted cash balance $.......... Balance from company records $.......... Add: Note collected by Bank $.......... Add: Internet on Note $.......... $.......... $.......... Deduct: Missing Deposit $.......... Deduct: Error in Recording $.......... Deduct: NSF checkreturned $.......... $.......... Adjusted cash balance $..........

Explanation / Answer

Balance from bank statement

$2040.75

Add: Deposit in transit

$ 370

Add: Cash on hand (Undeposited)

$.151.5

$ 521.5.

$ 2562.25

Deduct: Outstanding checks

2011.45

Adjusted cash balance

$ 78.5

Balance from company records

$ 472.3

Add: Note collected by Bank

$ 2900

Add: Internet on Note

$ 29

$ 2929

$ 3401.3

Deduct: Missing Deposit

$ 604

Deduct: Error in Recording

$940.2

Deduct: NSF check returned

$ 407.7

$ 1661.5

Adjusted cash balance

$ 716.7

Dec. 31

Accounts Receivable (error)

$ 940.2

Accounts Recevable (NSF check)

$ 407.7

Loss from Cash Shortage (missing deposit)

$ 604

Cash

$ 1951.9

Dec. 31

Cash

$ 2929

Notes Receivable

$ 2900

Interest Revenue

$ 29

Balance from bank statement

$2040.75

Add: Deposit in transit

$ 370

Add: Cash on hand (Undeposited)

$.151.5

$ 521.5.

$ 2562.25

Deduct: Outstanding checks

2011.45

Adjusted cash balance

$ 78.5

Balance from company records

$ 472.3

Add: Note collected by Bank

$ 2900

Add: Internet on Note

$ 29

$ 2929

$ 3401.3

Deduct: Missing Deposit

$ 604

Deduct: Error in Recording

$940.2

Deduct: NSF check returned

$ 407.7

$ 1661.5

Adjusted cash balance

$ 716.7

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