One Trick Pony Company, Inc. received their bank statement for October 31, 2014,

Question

One Trick Pony Company, Inc. received their bank statement for October 31, 2014, showing a balance of $11,073. 1. Prepare the bank statement in good form, given the following information: General Ledger Cash Balance is shown as $12,606. One Trick made a deposit on October 31 of $ 1,250 which is not shown on the statement. There are three outstanding checks, 5587 $186, 5588 $85 and 5595 $175. The bank acts as the collection agency for interest earned on One Trick investments. The statement revels $465 was collected during the month, but not recorded. There is a bank charge of $50, and interest earned of $55. A check from Dead Beat, Inc. in the amount of $166 was returned for NSF. A deposit of $123 was not on the bank statement. Investigation revealed that the bank credited the account of Tricky Fishy for the deposit. Another deposit in the amount of $101 was made, however the new accountant recorded the amount on the books as $1,011. 2. Prepare any necessary adjusting entries. 3. What is the correct cash balance to be shown on the Balance Sheet?

Explanation / Answer

One Trick Pony Company Inc. 1 Bank Reconciliation Statement as on October 31, 2014 Particulars Amt $ Balance as per Bank Statement 11073 Add: Recorded by bank, but not recorded into books Bank Charges 50 Retuned check of Dead Beat Inc. 166 Recorded into books, but not recorded by bank Deposit made on October 31st 1250 Deposit , credited to Tricky Fishy Account by Bank 123 Accounting error, to be rectified (1011-101) 910 Less: Recorded by bank, but not recorded into books Interest collected by Bank -465 Interest earned -55 Recorded into books, but not recorded by bank Outstanding checks 5587 -186 5588 -85 5595 -175 Balance as per Cash General ledger 12606 2 Necessary Adjustment Entries 1. Interest Collected by bank, but not recorded Bank Account …………….Dr $       465.00 Interest Income Account…………..Cr $      465.00 2. Bank charges and Interest earned Bank Charges…………….Dr $         50.00 Bank Account…………………………..Cr $        50.00 Bank Account …………….Dr $         55.00 Interest Income Account…………..Cr $        55.00 3. Check from Dead Beat Inc returned Dead Beat Inc. Account …………Dr $       166.00 Bank Account…………………………..Cr $      166.00 4. Accounting Error made by New Accountant, rectification Cash or Deposit Account ………Dr $       910.00 Bank Account…………………………….Cr $      910.00 3 Correct cash balance to be shown in Balance Sheet Pre-adjustment cash balance $ 12,606.00 Adjustment made 1. Interest Collected by bank, but not recorded $       465.00 2. Bank charges and Interest earned Bank Charge $        -50.00 Interest Earned $         55.00 3. Check from Dead Beat Inc returned $     -166.00 4. Accounting Error made by New Accountant, rectification $     -910.00 Correct cash balance to be shown in Balance Sheet $ 12,000.00

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.