Mgmt_200_Spring_2008_solutions_2-22-08(2,25)

Mgmt_200_Spring_2008_solutions_2-22-08(2,25) - $22,360...

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Management 200 – Introductory Financial Accounting– Spring 2008 Krannert School of Management - Purdue University Solutions to class assignment for February 22, 2008 P6–8. 1. Comparison of deposits listed in the Cash account with deposits listed on the bank statement reveals a $5,000 deposit in transit on August 31. 2. Comparison of the checks cleared on the bank statement with (a) outstanding checks from July, and (b) checks written in August reveals two outstanding checks at the end of August ($290 + $550 = $840). 3. HIRST COMPANY Bank Reconciliation, August 31, 2007 Company's Books Bank Statement Ending balance per Cash account. .............................. $20,280 Ending balance per bank statement. ........................... $18,200 Additions: Additions: Interest collected. .................... 2,180 Deposits in transit. ................... 5,000 22,460 23,200 Deductions: Deductions: Bank service charges. ................................. 100 Outstanding checks. ................. 840 Correct cash balance. ..................................
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Unformatted text preview: $22,360 Correct cash balance. ............... $22,360 4. (1) Cash (+A). .................................................................................... 2,180 Interest revenue (+R, +SE). ............................................. 2,180 Interest collected. (2) Bank service charge expense (+E, –SE) . .................................... 100 Cash (–A). ........................................................................ 100 Service charges deducted from bank balance. These entries are necessary because of the changes in the regular Cash account that have not yet been recorded by the company. The bank already has recorded them in its accounts. The Cash account (and the other accounts in the entries) must be brought up to date for financial statement purposes. 5. Current Assets: Cash. ......................................................................................................... $22,360...
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This note was uploaded on 11/22/2009 for the course MGMT 200 taught by Professor Greigg during the Spring '08 term at Purdue.

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