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NP+10e+Ch07+Solutions - P7-1 Unique Globe Inc 1 Bank...

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P7-1 Unique Globe, Inc. 1. Bank Reconciliation 2. Adjusting Entries Unique Globe, Inc. 31-May Cash $12,200.00 Bank Reconciliation Notes Receivable $12,000.00 May 31, 2010 Interest Receivable $200.00 Notes & interest collected by bank Bank balance, May 31 $53,451.46 Add: 31-May Cash $250.00 Deposits in transit $5,220.94 Interest Income $250.00 Bank charge deducted in error $750.00 $5,970.94 Interest posted by bank $59,422.40 Less: Checks outstanding $3,936.80 31-May Merchandise Inventory $540.00 Adjusted bank balance, May 31 $55,485.60 Cash $540.00 Correct inventory purchase transaction Unadjusted book balance, May 31 $43,784.16 Add: 31-May Bank Service Charges Expense $30.00 Notes receivable collected by bank $12,000.00 Cash $30.00 Interest receivable collected by bank $200.00 Bank service charge for May Interest posted on average balance $250.00 $12,450.00 $56,234.16 31-May Accounts Receivable $178.56 Less: Cash $178.56 Check recorded incorrectly in check register $540.00 ($1,920 - $1,380) NSF check from Eve Lay returned Bank service charge $30.00 NSF check from customer, Eve Lay $178.56 $748.56 3. Cash Balance, May 31 Adjusted book balance, May 31 $55,485.60 The cash balance for May 31 should be $55,485.60. 4. Comments A bank reconciliation is an important internal control process that allows the company to monitor the integrity of its cash accounts. It also provides the company with an opportunity to determine the true cash balance for reporting purposes. Certain adjusting entries must be performed as a result of the bank reconciliation to bring affected ledger account balances to the correct amounts.
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P7-2 Moore Company 1. T Account Analysis Accounts Receivable
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