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Sample Problem

Sample Problem. Chapter 9. Preparing a bank reconciliation statement and journalizing entries to adjust the cash balance. On August 31, 2007, the balance in the checkbook and the Cash account of the Hampton Inn was $11,549.

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Sample Problem

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  1. Sample Problem Chapter 9

  2. Preparing a bank reconciliation statement and journalizing entries to adjust the cash balance.On August 31, 2007, the balance in the checkbook and the Cash account of the Hampton Inn was $11,549. • The balance shown on the bank statement on the same date was $13,097. • Notes • The firm’s records indicate that a $880.00 deposit dated August 30 and a $477.00 deposit dated August 31 do not appear • on the bank statement. • A service charge of $8 and a debit memorandum of $320 covering an NSF check have not yet been entered in the • firm’s records. (The check was issued by Neal Woodson, a credit customer.) • The following checks were issued but have not yet been paid by the bank. • A credit memorandum shows that the bank collected a $2,000 note receivable and interest of $60 for the firm. • These amounts have not yet been entered in the firm’s records. • INSTRUCTIONS • Prepare a bank reconciliation statement for the firm as of August 31. • Record general journal entries for items on the bank reconciliation statement that must be journalized. • Date the entries September 4, 2007. • Analyze: What effect did the journal entries recorded as a result of the bank reconciliation have on the • fundamental accounting equation?

  3. Bank reconciliation statementFirst Section Bank statement balance $13,097 + deposits in transit 880 477 (-) outstanding checks (110) (25) (238) (577) (78) (145) Adjusted bank balance $13,281

  4. Bank reconciliation statementSecond section Book balance $11,549 + deposits not recorded 2,000 60 (-) deductions (8) (320) Adjusted book balance $13,281 *Note – the adjusted bank balance and the adjusted book balance are now equal.

  5. General Journal Entries • Accounts Receivable $320 Cash $320 Miscellaneous expense $8 Cash $8

  6. General Journal Entries • Cash $2,060 Notes receivable $2,000 Interest income 60

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