uestion #4 The following information is available regarding Stone Inc.\'s Bank i
ID: 2575514 • Letter: U
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uestion #4 The following information is available regarding Stone Inc.'s Bank information for September 2017: 1. The balance on the September 30, 2017 Bank statement was $8,316.00. 2. The company's Cash ledger account showed a balance of $8,778.00 on September 30 3. Deposit of $800 made by Stone, late on September 30 was not included on the Bank statement. 4. A comparison between the cheques returned with the Bank statement and the company records indicates that the following cheques were still outstanding on September 30: No. 101 No. 112 S 641.00 5. 6. 7. A cheque for $1,206.00 from a customer was returned along with the September's bank statement as a NSF cheque. Stone intends to pursue payment from the customer A cheque written by Stone to pay an outstanding account in the amount of $191. was erroneously entered as $119. by Stone's bookkeeper. Bank service charges amounted to $50. Required: 1. 2. Prepare the September Bank Reconciliation for Stone Inc. Prepare necessary Journal Entries to record the adjustments from the Bank Reconciliation for Stone Inc. "Bank reconciliation is a waste of time as the timing differences between the bank statement and the books will be taken care of as time goes by." Do you agree with this statement? Why or why not? 3.Explanation / Answer
1)
2)
3)No,Reconcilation of statement on a timely basis is a useful activity to determine the exact balance of cash as on the date otherwise it will lead to misleading decision .
As Financial position statement is prepared on a particular date ,it is beneficial to determine the correct balance of cash.
Bank Reconcilation Balance as per Bank 8316 Balance as per Book 8778 Deposit in transit 800 NSF returned -1206 outstanding checks [1025+641] -1666 Error in recording [191-119] -72 Bank charge -50 Adjusted balance 7450 Adjusted balance 7450Related Questions
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