Exercise 5-11 (Static) Bank reconciliation adjustment LO 5-3 Refer to the information given below: The June 30 cash balance in the general ledger is $1,940. The June 30 balance shown on the bank statement is $1,168. Checks issued but not returned with the bank statement were Number 712 for $33 and Number 723 for $160. A deposit made late on June 30 for $800 is included in the general ledger balance but not in the bank statement balance. Returned with the bank statement was a notice that a customer's check for $120 that was deposited on June 24 had been returned because the customer's account was overdrawn. During a review of the checks that were returned with the bank statement, it was noted that the amount of Check Number 728 was $72 but that in the company's records supporting the general ledger balance, the check had been erroneously recorded as a payment of an account payable in the amount of $27. Required: Show the reconciling items in a horizontal model that should be prepared to reflect the reconciling items as on June 30. Prepare the adjusting journal entry that should be prepared to reflect the reconciling items. What is the amount of cash to be included in the June 30 balance sheet for the bank account reconciled?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter4: Internal Control And Cash

Section: Chapter Questions

Problem 47E

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Exercise 5-11 (Static) Bank reconciliation adjustment LO 5-3

Refer to the information given below:

The June 30 cash balance in the general ledger is $1,940.
The June 30 balance shown on the bank statement is $1,168.
Checks issued but not returned with the bank statement were Number 712 for $33 and Number 723 for $160.
A deposit made late on June 30 for $800 is included in the general ledger balance but not in the bank statement balance.
Returned with the bank statement was a notice that a customer's check for $120 that was deposited on June 24 had been returned because the customer's account was overdrawn.
During a review of the checks that were returned with the bank statement, it was noted that the amount of Check Number 728 was $72 but that in the company's records supporting the general ledger balance, the check had been erroneously recorded as a payment of an account payable in the amount of $27.

Required:

1. Show the reconciling items in a horizontal model that should be prepared to reflect the reconciling items as on June 30.
2. Prepare the adjusting journal entry that should be prepared to reflect the reconciling items.
What is the amount of cash to be included in the June 30 balance sheet for the bank account reconciled?

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