Demonstration_Problems_for_Chapter_7 - Demonstration...

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Demonstration Problems for Chapter 7 Demonstration Problem 7-1 Bank Reconciliation The bank statement for Greenbrier Furniture Stores showed a balance of $63,289 as of November 30. The unadjusted balance in the general ledger cash account at November 30 was $59,345. An examination of the bank statement disclosed the following information. 1. Outstanding checks totaled $24,598. 2. The bank had issued a $157 credit memo for interest deposited into Greenbrier’s account. 3. The bank had deducted $469 for two non-sufficient funds (NSF) checks. 4. The bank statement enclosures included a debit memo for $36 the bank had deducted from Greenbrier’s account to pay for new checks. 5. Deposits in transit were $19,060. 6. The bank had mistakenly deducted from Greenbrier’s account a $1,246 check drawn on the Greenbay Company. Required a. Reconcile the balance shown on the bank statement with the unadjusted balance of the company’s cash account. b. Prepare the general journal entries necessary to adjust the cash balance per books to the true cash balance.
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