The rest of Shamara System infi ciliation as Subtraction from bank balance Addit

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The rest of Shamara System infi

ciliation as Subtraction from bank balance Addition to bank balance Subtraction from book balance Um bank balance tracted from bank balance Subtraction from book balance Added to bank balance a Bank Reconciliation We follow " s helpful to refer to the bant - Addition to book balance Cash and Internal Controls was originally received from a customer, W. Sox, in payment of her account. The company has not yet reco company. The bank deducted a $50 collection fee and deposited the remainder in the company's account. The collection and fee have not yet been recorded Chapter 6 rded its return. The credit memorandum is from a $7.400 note that the bank collected for the 1. Prepare the May 31, 2015, bank reconciliation for Shamara Systems. 2. Prepare the journal entries (in dollars and cents) to adjust the book balance of cash to the reconciled Required k ) Reconciled e, $22,07150 12) r. Receivable $7400.00 balance Analysis Component 3. The bank statement reveals that some of the prenumbered checks in the sequence are missing. Describe three possible situations to explain this.

Explanation / Answer

2. In the books of Shamara Systems:

3. Three possible situations :

a. The checks are still in transit, yet to be presented to the bank for clearance.

b. The checks have been written and recorded in the books, but not yet put in transit to the bank.

c. The checks have been misplaced.

d. Embezzlement of Cash.

Event Account Titles Debit Credit $ $ 1. Cash 7,350 Bank Service Chages 50 Note Receivable 7,400 To record collection of note receivable by bank 2. Bank Service Charges 14 Cash 14 To record bank charges debited by babk 3. Accounts Receivable : W. Sox 431.80 Cash 431.80 To reinstate account receivable for NSF check 4. Utilities Expense 10 Cash 10 To rectify error in recording check

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