Accounting: What the Numbers Mean 11th Edition by Wayne McManus,Daniel Viele,David Marshall

Exercise 7

Bank reconciliation adjustment
a. Show the reconciling items in a horizontal model or write the adjusting journal entry (or entries) that should be prepared to reflect the reconciling items of Exercise 5.8.
b. What is the amount of cash to be included in the August 31 balance sheet for the bank account reconciled in Exercise 5.8?
Reference Exercise 5.8:
Bank reconciliation Prepare a bank reconciliation as of August 31 from the following information:
a. The August 31 balance shown on the bank statement is $9,810.
b. There is a deposit in transit of $1,260 at August 31.
c. Outstanding checks at August 31 totaled $1,890.
d. Interest credited to the account during August but not recorded on the company's books amounted to $108.
e. A bank charge of $56 for checks was made to the account during August. Although the company was expecting a charge, the amount was not known until the bank statement arrived.
f. In the process of reviewing the canceled checks, it was determined that a check issued to a supplier in payment of accounts payable of $739 had been recorded as a disbursement of $379.
g. The August 31 balance in the general ledger Cash account, before reconciliation, is $9,488.