Exercise 7-6 Rachel Sells is unable to reconcile the bank balance at January 31.
ID: 2565014 • Letter: E
Question
Exercise 7-6
Rachel Sells is unable to reconcile the bank balance at January 31. Rachel’s reconciliation is shown here.
35.50
$4,646.70
940.00
$4,717.70
(a) What is the proper adjusted cash balance per bank? (Round answers to 2 decimal places, e.g. 52.75.)
(b) What is the proper adjusted cash balance per books? (Round answers to 2 decimal places, e.g. 52.75.)
(c) Prepare the adjusting journal entries necessary to determine the adjusted cash balance per books. (Round answers to 2 decimal places, e.g. 52.75. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
(To record bank service charge)
Cash balance per bank $4,062.20 Add: NSF check 620.00 Less: Bank service charge35.50
Adjusted balance per bank$4,646.70
Cash balance per books $4,360.20 Less: Deposits in transit 582.50 Add: Outstanding checks940.00
Adjusted balance per books$4,717.70
Explanation / Answer
Answer:
(a)
The proper adjusted cash balance per bank= $3704.7
Working notes for the answer
Cash balance per bank
4062.2
Add:
Deposits in transit
582.5
Less:
Outstanding checks
940
Adjusted Balance as per bank
3704.7
__________________________________________-
(b)
The proper adjusted cash balance per book= $3704.7
Working notes for the answer
Cash balance per books
Less:
4360.2
NSF check
620
Bank service charge
35.5
Adjusted Balance as per books
3704.7
_________________________________________________
(C)
Prepare the adjusting journal entries necessary to determine the adjusted cash balance per books
Date
Account Titles and Explanation
Debit
Credit
Jan. 31
Account Recivable
620
TO cash
620
(To record NSF check)
Jan. 31
Bank Charges Expanses
35.5
TO cash
35.5
(To record bank service charge)
Cash balance per bank
4062.2
Add:
Deposits in transit
582.5
Less:
Outstanding checks
940
Adjusted Balance as per bank
3704.7
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