P7-13 (Bank Reconciliation and Adjusting Entries)

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Intermediate Accounting, 13th Edition

by Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

March 2009, ©2010

ISBN 978-0-470-37494-8

P7-13 (Bank Reconciliation and Adjusting Entries)

The cash account of Aguilar Co. showed a ledger balance of $3,969.85 on June 30, 2010. The bank statement as of that date showed a balance of $4,150. Upon comparing the statement with the cash record, the following facts were determined.

1.       There were bank service charges for June of $25

2.       A bank memo stated that Bao Dai’s note for $1,200 and interest of $36 had been collected on June 29, and the bank had made a charge of $5.50 on the collection. (No entry had been made on Aguilar’s books when Bao Dai’s note was sent to the bank for collection.)

3.       Receipt for June 30 for $3,390 were not deposited for collection

4.       Checks outstanding on June 30 totaled $2,136.05

5.       The bank had charged the Aguilar Co.’s account for a customer’s uncollectible check amounting to $253.20 on June 29.

6.       A customer’s check for $90 had been entered as $60 in the cash receipts journal by Aguilar on June 15

7.       Check no. 742 in the amount of $491 had been entered in the cash journal as $419, and check no. 747 in the amount of $58.20 had been entered as $582. Both checks had been issued to pay for purchases of equipment.

Instructions

(a)    Prepare a bank reconciliation dated June 30, 2010, proceeding to correct cash balance

(b)   Prepare any entries necessary to make the books correct and complete