For each of the following errors, explain the effect on (i) the adjusted bank statement cash balance and (ii)?

Question

The following is the rest of the question.

Required

1. Prepare the bank reconciliation for this company as of July 31, 2005.

2. Prepare the journal entries necessary to bring the company’s book balance of cash into conformity

with the reconciled cash balance as of July 31, 2005.

Analysis Component

3. Assume that the July 31, 2005, bank reconciliation for this company is prepared and some items

are treated incorrectly. For each of the following errors, explain the effect of the error on (i) the

adjusted bank statement cash balance and (ii) the adjusted cash account book balance.

a. The company’s unadjusted cash account balance of $26,193 is listed on the reconciliation as

$26,139.

b. The bank’s collection of the $9,000 note less the $45 collection fee is added to the bank statement

cash balance on the reconciliation.

Answer 1

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