The cash account for Stone Systems at July 31, 2016, indicated a balance of $17,

Question

The cash account for Stone Systems at July 31, 2016, indicated a balance of $17,750. The bank statement indicated a balance of $33,650 on July 31, 2016. Comparing the bank statement and the accompanying canceled checks and memos with the records reveals the following reconciling items:

Chart of Accounts

Amount Descriptions

Bank Reconciliation

1. Prepare a bank reconciliation. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. “Deduct:” or “Add:” will automatically appear if it is required.

STONE SYSTEMS

Bank Reconciliation

July 31, 2016

1

Cash balance according to bank statement

2

3

4

5

6

Adjusted balance

7

8

Cash balance according to company’s records

9

10

11

12

13

Adjusted balance

Journal

2. Journalize the necessary entries. The accounts have not been closed. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

1

2

3

4

5

6

Final Question

3. If a balance sheet were prepared for Stone Systems on July 31, 2016, what amount should be reported as cash?

A. Checks outstanding totaled $17,865. B. A deposit of $9,150, representing receipts of July 31, had been made too late to appear on the bank statement. C. The bank had collected $6,095 on a note left for collection. The face of the note was $5,750. D. A check for $390 returned with the statement had been incorrectly recorded by Stone Systems as $930. The check was for the payment of an obligation to Holland Co. for the purchase of office supplies on account. E. A check drawn for $1,810 had been incorrectly charged by the bank as $1,180. F. Bank service charges for July amounted to $80.

Explanation / Answer

3) $ 24305 as cash should be reported

Balance as per book 17750 Balance as per bank 33650 Add:Note collected 6095 Add:Deposti in transit 9150 less:Bank charges -80 less:Outstanding check -17865 error in recording [ 930-390] 540 Error i recording [ 1810-1180] -630 adjusted balance 24305 adjusted balance 24305

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