Problem 8-05A a-b (Part Level

Question

Problem 8-05A a-b (Part Level Submission) (Video)

The bank portion of the bank reconciliation for Vaughn Companyat November 30, 2020, was as follows.

Vaughn COMPANYBank ReconciliationNovember 30, 2020
Cash balance per bank		$14,767.90
Add: Deposits in transit		2,530.20
		17,298.10
Less: Outstanding checks
Check Number	Check Amount
3451	$ 2,260.40
3470	720.10
3471	844.50
3472	1,426.80
3474	1,054.50	6,306.30
Adjusted cash balance per bank		$10,991.80

The adjusted cash balance per bank agreed with the cash balance perbooks at November 30.The December bank statement showed the following checks anddeposits.

Bank Statement
Checks			Deposits
Date	Number	Amount	Date	Amount
12-1	3451	$2,260.40	12-1	$ 2,530.20
12-2	3471	844.50	12-4	1,211.60
12-7	3472	1,426.80	12-8	2,365.10
12-4	3475	1,640.70	12-16	2,672.70
12-8	3476	1,300	12-21	2,945
12-10	3477	2,130	12-26	2,567.30
12-15	3479	3,080	12-29	2,836
12-27	3480	600	12-30	1,025
12-30	3482	475.50	Total	$18,152.90
12-29	3483	1,140
12-31	3485	520.80
	Total	$15,418.70

The cash records per books for December showed the following.

Cash Payments Journal						Cash Receipts Journal
Date	Number	Amount	Date	Number	Amount	Date	Amount
12-1	3475	$1,640.70	12-20	3482	$475.50	12-3	$ 1,211.60
12-2	3476	1,300	12-22	3483	1,140	12-7	2,365.10
12-2	3477	2,130	12-23	3484	793.50	12-15	2,672.70
12-4	3478	621.30	12-24	3485	250.80	12-20	2,954
12-8	3479	3,080	12-30	3486	889.50	12-25	2,567.30
12-10	3480	600	Total		$13,728.70	12-28	2,836
12-17	3481	807.40				12-30	1,025
						12-31	1,690.40
						Total	$17,322.10

The bank statement contained two memoranda:

1.		A credit of $2,330 for the collection of Langer Company of anelectronic funds transfer.
2.		A debit for the printing of additional company checks$89.50.

At December 31, the cash balance per books was $14,585.20, and thecash balance per the bank statement was $19,742.60. The bank didnot make any errors, but Langer Company made twoerrors.

_____________________________________________________________

– I have already used the four steps in the reconciliationprocedure to prepare a bank reconciliation at December 31.

– I now need to prepare the adjusting entries based on thereconciliation. (Credit account titles areautomatically indented when amount is entered. Do not indentmanually. Round answers to 2 decimal places, e.g.52.75.)

Answer:

Solution 1:

VaughnCompany
Bank Reconciliation – December31
Bank’s Cash balance		Company’s cash balance
Particulars	Amount	Particulars	Amount
Ending balance as per Bank Statements	$19,742.60	Ending Balance as per cash books	$14,585.20
Additions:		Additions:
Outstanding cash receipt	$1,690.40	EFT collection	$2,330.00

Deductions:		Deductions:
Outstanding Checks (Check no3470, 3474, 3478, 3481, 3484, 3486) ($720.10 + $1,054.50 + $621.30+ $807.40 + $793.50 + $889.50)	$4,886.30	Incorrect recording of deposit ($2,954 -$2,945)	$9.00
		Check printing charges	$89.50
		Incorrect recording of check no 3485	$270.00

Up to date cash balance as per bank	$16,546.70	Up to date cash balance as per books	$16,546.70

Solution 2:

JournalEntries
Date	Particulars	Debit	Credit
31-Dec	Cash Dr	$2,330.00
	To Accountsreceivables		$2,330.00
	(To record EFT collection)

31-Dec	Accounts receivables Dr	$9.00
	To Cash		$9.00
	(Correction entry for deposits)

31-Dec	Miscellenous Expenses Dr	$89.50
	To Cash		$89.50
	(Check printing charges debited)

31-Dec	Accounts payable Dr	$270.00
	To Cash		$270.00
	(Correction entry for check no 3485)

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