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Student Name:
Class:
27,233$ 27,497$
11,514 7,955
38,747 35,452
1,482$ NSF check 805$
382 Service charge 25
2,281 4,145 Error (Check no. 3056) 20 850
34,602$ «- Correct! Adjusted book balance 34,602$ «- Correct!
Date Account Title Debit Credit
Jul 31 7,955
45
8,000 «- Correct!
31 805
805 «- Correct!
31 25
25 «- Correct!
31 20
20 «- Correct!
To charge account for NSF check plus fees.
McGraw-Hill/Irwin
Instructor
Problem 08-04A
To record note collection less fees.
General Journal
BRANCH COMPANY
Cash
Bank Reconciliation
Collection Expense
Miscellaneous Expenses
BRANCH COMPANY
Adjusted bank balance
Accts. Rec.- E. Shaw
3065
3069
Deduct:
July 31, 2013
Bank statement balance
Add:
Deposit of July 31
Total
Notes Receivable
Book balance
Add:
Proceeds of note less collection charge
Deduct:
Outstanding Checks:
3031
Cash
Cash
Rent Expense
Cash
To record bank service fee.
To correct an entry error.
bank statement cash balance and (ii) the adjusted cash account
For each of the following errors, explain the effect on (i) the adjusted
Student Name:
Class:
McGraw-Hill/Irwin
Instructor
Problem 08-04A
a. (i) The final balance that results from adjusting the bank statement
balance will not be affected by the error; and
(ii) The final balance that results from adjusting the book balance of cash will
statement cash balance on reconciliation.
b. Collection of $8,000 note less $45 collection fee is added to bank
as $27,947.
a. Unadjusted cash account balance of $27,497 is listed on reconciliation
book balance.
be overstated by $450 ($27,947-$27,497), and the bank reconciliation
will not balance.
b. (i) The final balance that results from adjusting the bank statement
balance will be overstated by $7,955; and
(ii) The final balance that results from adjusting the book balance will be
understated by$7,955.
Cash balance 27,497$
Bank statement balance 27,233$
Outstanding checks:
No. 3031 1,482$
No. 3040 (returned with July statement) 558$
No. 3065 382$
No. 3069 2,281$
Check No. 3056 (rent pmt.):
Amount entered in books 1,250$
Actual amount 1,270$
Branch note collection:
Total collected by bank 8,000$
Collection fee charged 45$
Evan Shaw check:
Amount of NSF check 795$
NSF charge by bank 10$
Bank service charge 25$
Deposit not yet credited by bank 11,514$
Additional information for analysis:
(a) Unadjusted cash account balance 27,497$
Reported unadjusted cash account balance 27,947$
(b) Note collection is added to bank statement
cash balance on reconciliation ($8,000 less
$45 collection fee)
BRANCH COMPANY
Given Data P08-04A:
Student Name:
Class:
18,453.25$ 17,404.20$
1,682.75 12.50$
20,136.00 1,485.00 1,497.50
18,901.70
494.25$ 600.25
982.30 30.00
388.00 1,864.55 630.25
18,271.45$ «- Correct! 18,271.45$ «- Correct!
Date Account Title Debit Credit
Sep 30 12.50
12.50 «- Correct!
30 1,485.00
15.00
1,500.00 «- Correct!
30 600.25
600.25 «- Correct!
30 30.00
30.00 «- Correct!
McGraw-Hill/Irwin
Instructor
Problem 08-05A
To correct an entry error.
To charge account for NSF check plus fee.
To record note collection less fee.
Bank statement balance
Add:
To record interest earned.
September 30, 2013
Bank Reconciliation
CHAVEZ COMPANY
General Journal
CHAVEZ COMPANY
Deposit of September 30
Total
The bank statement reveals that some of the prenumbered checks in the sequence are missing.
Describe three situations that could explain this.
There are several possible reasons why some prenumbered checks are missing from
the sequence of canceled checks returned with a bank statement. Reasons include:
(1) Some of the checks in the numbered sequence may have cleared the bank in a
previous period and were returned with the bank statement in that previous period.
(2) Some of the checks in the numbered sequence may remain outstanding. If so, they
will be returned with the bank statement in a later period when they clear the bank.
Adjusted bank balance
Book balance of cash
Add:
Interest earned
Proceeds of note less coll. fee
Deduct:
NSF check
Error on check no. 5904
Total
Adjusted book balance
Deduct:
Checks No. 5893
5906
5908
Computer Equipment
Cash
Collection Expense
Notes Receivable
Accts. Rec.-S. Nilson
Cash
Interest Earned
Cash
Cash
Student Name:
Class:
McGraw-Hill/Irwin
Instructor
Problem 08-05A
check to the wrong account. When the bank detects the error, it will return the check
separately with a note of explanation to the depositor.
numbered sequence, perhaps because of making an error in writing the checks.
(4) Occasionally, a check will reach the bank but the bank will incorrectly charge the
(3) The issuer of the checks may have voided one or more of the checks in the
August 31 bank reconciliation:
Outstanding checks:
No. 5888 1,028.05$
No. 5893 494.25$
From the September 30 bank statement:
September 30 Bank Statement:
Previous balance 16,800.45$
Total Checks and Debits 9,620.05$
Total Deposits and Credits 11,272.85$
Current Balance 18,453.25$
09/04 5902 719.90 09/03 15,772.40
09/07 5901 1,824.25 09/04 15,052.50
09/17 NSF 600.25 09/05 16,156.25
09/28 18,763.40
Date Description Amount 09/29 16,955.75
09/05 Deposit 1,103.75 09/30 18,453.25
09/12 Deposit 2,226.90
09/21 Deposit 4,093.00
09/25 Deposit 2,351.70
09/30 Interest 12.50
09/30 Credit memo 1,485.00
From Chavez Company's Accounting Records:
Cash Receipts Deposited: Cash Disbursements:
Date Cash Debit Check No. Cash Credit
Sept. 5 1,103.75 5901 1,824.25
12 2,226.90 5902 719.90
21 4,093.00 5903 399.10
25 2,351.70 5904 2,060.00
30 1,682.75 5905 937.00
11,458.10 5906 982.30
5907 213.85
5908 388.00
5909 1,807.65
9,332.05
Cash Acct. No. 101
CHAVEZ COMPANY
Given Data P08-05A:
Deposits and Credits
Given Data P08-05A:
Date Explanation PR Debit Credit Balance
Aug. 31 Balance 15,278.15
Sept. 30 Total receipts R12 11,458.10 26,736.25
30 Total disbursements D23 9,332.05 17,404.20
Check No. 5904 for computer equipment:
Entered in accounting records 2,060.00$
Correct amount of check 2,090.00$
Collection of Note:
Credit memorandum from bank 1,500.00$
Bank collection fee 15.00$
Check figures:
(1) Reconciled balance 18,271.45$
(2) Credit Note Receivable 1,500.00$
