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Bank Reconciliation & Adjusting Entries

Bank Reconciliation & Adjusting Entries.

Name: Date:
Instructor: Course:
Financial Accounting, 5th Edition, by Weygandt, Kieso, and Kimmel
Solving Financial Accounting Problems Using Microsoft Excel for Windows by Rex A Schildhouse

Problem P8-3A, Agricultural Genetics Company of Lawrence, Kansas, spreads herbicides and applies liquid fertilizer for local farmers. On May 31, 2006, the company's cash account per its general ledger showed the following balance.

Date: Explanation: Ref: Debit: Credit: Balance:
May 31 Balance 6,781.50

The bank statement from Lawrence State Bank on that date showed the following balance.
Lawrence State Bank
Checks and Debits Deposits and Credits Daily Balance
May 31 6,804.60

A comparison of the details on the bank statement with the details in the cash account revealed the following facts.
1. The statement included a debit memo of $40.00 for the printing of additional company checks.
2. Cash sales of $836.15 on May 12 were deposited in the bank. The cash receipts journal entry and the deposit slip were
incorrectly made for $846.15 The bank credited Agricultural Genetics Company for the correct amount.
3. Outstanding checks at May 31 totaled $315.25 and deposits in transit were $936.15
4. On May 18, the company issued check no. 1181 for $685.00 to M. Datz on account. The check which cleared the bank
in May, was incorrectly journalized and posted by Agricultural Genetics Company for $658.00
5. A $2,000.00 note receivable was collected by the bank for Agricultural Genetics Company on May 31 plus $80.00
interest. The bank charged a collection fee of $25.00 No interest has been accrued on the note.
6. Included with the cancelled checks was a check issued by Bohr Company to Fred Mertz for $600.00 that was incorrectly
charged to Agricultural Genetics Company by the bank.
7. On May 31, the bank statement showed an NSF charge of $734.00 for a check issued by Tyler Gricius, a customer, to
Agricultural Genetics Company.

Instructions:
(a) Prepare the bank reconciliation at May 31, 2006.

AGRICULTURAL GENETICS COMPANY
Bank Reconciliation
May 31, 2006
Cash balance per bank statement Amount
Add: Amount
Amount Formula
Formula
Less: Amount
Adjusted cash balance per bank Formula

Cash balance per books Amount
Add:
Amount
Formula
Less: Amount
Amount
Amount
Amount Formula
Adjusted cash balance per books Formula

(b) Prepare the necessary adjusting entries for Agricultural Genetics Company at May 31, 2006.

May 31 Account title Amount
Account title Amount
Account title Amount
Account title Amount

Account title Amount
Account title Amount

Account title Amount
Account title Amount

Account title Amount
Account title Amount

Account title Amount
Account title Amount

Attachments

Solution Preview

Solving Financial Accounting Problems Using Microsoft Excel for Windows by Rex A Schildhouse
Problem P8-3A, Agricultural Genetics Company of Lawrence, Kansas, spreads herbicides and applies liquid fertilizer for local farmers. On May 31, 2006, the company's cash account per its general ledger showed the following balance.

Date: Explanation: Ref: Debit: Credit: Balance:
May 31 Balance 6,781.50

The bank statement from Lawrence State Bank on that date showed the following balance.
Lawrence State Bank
Checks and Debits Deposits and Credits Daily Balance
May 31 6,804.60

A comparison of the details on the bank statement with the details in the cash account revealed the following facts.
1. The statement included a debit memo ...

Solution Summary

This solution is comprised of a Bank Reconciliation & Adjusting Entries for Agricultural Genetics Company of Lawrence, Kansas.

$2.19