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Sample Problem Chapter 9 Preparing a bank reconciliation statement and journalizing entries to adjust the cash balance. On August 31, 2007, the balance.

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Presentation on theme: "Sample Problem Chapter 9 Preparing a bank reconciliation statement and journalizing entries to adjust the cash balance. On August 31, 2007, the balance."— Presentation transcript:

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2 Sample Problem Chapter 9

3 Preparing a bank reconciliation statement and journalizing entries to adjust the cash balance. On August 31, 2007, the balance in the checkbook and the Cash account of the Hampton Inn was $11,549. The balance shown on the bank statement on the same date was $13,097. Notes a.The firms records indicate that a $ deposit dated August 30 and a $ deposit dated August 31 do not appear on the bank statement. b.A service charge of $8 and a debit memorandum of $320 covering an NSF check have not yet been entered in the firms records. (The check was issued by Neal Woodson, a credit customer.) c.The following checks were issued but have not yet been paid by the bank. d.A credit memorandum shows that the bank collected a $2,000 note receivable and interest of $60 for the firm. These amounts have not yet been entered in the firms records. INSTRUCTIONS 1.Prepare a bank reconciliation statement for the firm as of August Record general journal entries for items on the bank reconciliation statement that must be journalized. Date the entries September 4, Analyze: What effect did the journal entries recorded as a result of the bank reconciliation have on the fundamental accounting equation?

4 Bank reconciliation statement First Section Bank statement balance$13,097 + deposits in transit (-) outstanding checks (110) (25) (238) (577) (78) (145) Adjusted bank balance$13,281

5 Bank reconciliation statement Second section Book balance$11,549 + deposits not recorded 2, (-) deductions (8) (320) Adjusted book balance$13,281 *Note – the adjusted bank balance and the adjusted book balance are now equal.

6 General Journal Entries (b)Accounts Receivable$320 Cash$320 Miscellaneous expense$8 Cash$8

7 General Journal Entries (d)Cash$2,060 Notes receivable$2,000 Interest income 60


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