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Aragon Co

E7-25 (Bank Reconciliation and Adjusting Entries) Aragon Company has just recieved the August 31, 2010, bank statement, which is summarized below.

Country national Bank Disbursements Receipts Balance

-Balance, August 1 $ 9,369

-Deposits durin August $32,200 41,569

-Note collected for depositor, including $40 interest 1,040 42,609

-Checks cleared during August $34,500 8,109

-Bank service charges 20 8,089

-Balance, August 31 8,089

***The general ledger Cash account contained the following entries for the month of August:

>>>CASH<<<

-Balance, August 1 10, 050 -Disbursements in August $35,403
-Receipts during August 35,000

***Deposits in transit at August 31 are $3,800, and check outstanding at August 31 total $1,550. Cash on hand at August 31 is $310. The bookeeper improperly entered one check in the books at $146.50 which was written for $164.50 for supplies (expense); it cleared the bank during the month of august.

***INSTRUCTIONS:

(a) Prepare a bank reconciliation dated August 31, 2010, Proceeding to a corect balance.
(b) Prepare any entries necessary to make the books correct and complete.
(c) What amount of cash should be reported in the August, 31 balance sheet?

Solution Preview

See attached file.

***INSTRUCTIONS:

(a) Prepare a bank reconciliation dated August 31, 2010, proceeding to a correct balance.

Balance per Bank Statement on Aug. 31
$ 8,089
Adjustments: 0
Deposits in transit
+ 3,800
Outstanding checks
- ...

Solution Summary

This solution is comprised of a detailed explanation to prepare a bank reconciliation dated August 31, 2010, Proceeding to a corect balance.

$2.19