Miller Corporation’s December 31, 2016, bank statement showed a $2,045.25 balanc
ID: 2552052 • Letter: M
Question
Miller Corporation’s December 31, 2016, bank statement showed a $2,045.25 balance. On this date, Miller’s Cash account reflected a $348.80 overdraft. In reconciling these amounts, the following information is discovered:
1. Cash on hand for undeposited sales receipts, December 31, $132.25. 2. Customer NSF check returned with bank statement, $422.20. 3. Cash sales of $637.25 for the week ended December 18 were recorded on the books. The cashier reports this amount missing, and it was not deposited in the bank. 4. Note receivable of $2,500.00 and interest of $25 collected by the bank and not recorded on the books. 5. Deposit in transit December 31, $320.00. 6. A customer check for $290.40 in payment of its account was recorded on the books at $940.20. 7. Outstanding checks, $2,030.55. Includes a duplicate check of $64.85 to C. Brown, who notified Miller that the original was lost. Miller stopped payment on the original check and has already adjusted the cash account in the accounting records for this amount.Explanation / Answer
1.RECONCILIATION STATEMENT
Bal. per bank statement $ 2045.25
Add : Sales receipts not yet deposited $ 132.25
Add : Deposits in transit $ 320
Less : Outstanding checks ($ 2030.55)
Adjusted bal. per bank statement $ 466.95
Bal. per Cash account ($ 348.80)
Less : NSF check ($ 422.20)
Less : missing cash sales ($ 637.25)
Add : Note receivable collected $ 2,500
Add : Interest collected $ 25
Less error correction ( $940.20 - $290.40) ($649.80),
Adjusted bal. per cash account $ 466.95
2.Journal Entries
Dr Accounts receivable 422.20
Cr Cash 422.20
Dr Cash shortage 637.25
Cr Cash 637.25
Dr Cash 2500
Cr Note receivable 2500
Dr Cash 25
Cr Interest revenue 25
Dr Accounts receivable 649.80
Cr Cash 649.80