Chapter 5 Internal Control, Cash, and Receivab adsheet P5-73B (Learning entries)

Question

Chapter 5 Internal Control, Cash, and Receivab adsheet P5-73B (Learning entries) The from Carolina First Bank data Learning objective 3: Preparing a bank reconciliation and the e October 31 bank statement of Dunlap Engineering Associates has . To prepare the Dunlap bank reconciliation, you gather Jou the foll a. Dunlap's Cash account shows a balance of 7,605.86 on October 31 b. The October 31 bank balance is 8,343.87 c. The bank statement shows that Dunlap earned 15.45 of interest on its hant during October. This amount was added to Dunlap's bank balance. d. Dunlap pays utilities (770) and insurance (250) by EFT e. The following Dunlap cheques did not clear the bank by October 31; Amount Cheque No. 237 288 291 293 294 29s 296 403.15 78.98 36.39 155.45 234.00 47.50 106.79 f. The bank statement includes a deposit of 6915.20, collected on account by the bank on behalf of Dunlap. g. The bank statement lists a 6.25 bank service charge h. On October 31, the Dunlap treasurer deposited 380.50, which will appear on the i. The bank statement includes a 405.00 deposit that Dunlap did not make. The bank j. The bank statement includes two charges for returned cheques from customers November bank statement. added 405.00 to Dunlap's account for another company's deposit. One is a 185.50 cheque received from a customer with the imprint "Unauthorized Signature." The other is a nonsufficient received from another customer funds cheque in the amount of 67.65 I Requirements 1. Prepare the bank reconciliation for Dunlap Engineering Associates 2. Journalize the October 31 transactions needed to update Dunlap's Cash account. Include an explanation for each entry

Explanation / Answer

SOLUTION

Dunlap Engineering Associates

Bank Reconcilaition

2. Journal Entry

Amount ($) Amount ($) Bank: Balance, October 31 8,343.87 Add: Deposit in transit 380.50 Less: Outstanding Checks 237 (403.15) 288 (78.98) 291 (36.39) 293 (155.45) 294 (234.00) 295 (47.50) 296 (106.79) Less: Correction of bank error (405.00) (1,467.26) Adjusted bank balance 7,257.11 Books: Balance, October 31 7,605.86 Add: Bank reconciliation of note receivable interest revenue on bank balance 915.20 Add: Bank Interest 15.45 930.65 Less: Service charges (6.25) Bank Charges (185.50) NSF Charges (67.65) Miscellaneous Charges (770+250) (1,020.00) (1,279.40) Adjusted Book balance 7,257.11

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