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    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?

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    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.

    $2.49

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