The Following Information Is Available for George Company at March

question 36

Essay

The following information is available for George Company at March 31:
∙ Adjusted bank balance as of March 31 was $6,450.
∙ Outstanding checks totaled $850.
∙ A customer's check for $260 was returned due to nonsufficient funds.
∙ March's service charge was $25.
∙ The bank collected an account receivable of $1,550.
∙ A new bookkeeper made the following errors:
# 930 for Rent Expense written for $900, recorded as $90
#1207 for Office Equipment written for $8,450, recorded as $4,850.
Forgot to record a cash sale of $1,000.
∙ A deposit was shown on the bank statement as $965, when the deposit ticket was correctly totaled to be $695.
∙ Deposits made at month-end totaled $4,516; these were not shown on bank statement.
Prepare a bank reconciliation to determine:
(1)the balance per bank at March 31 before any reconciling items,
(2)the balance in the Cash account at March 31 before any reconciling items.

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Definitions:

Prepaid Expenses

Expenses paid in advance for goods or services to be received in the future, recognized as assets until used.

Accrued Liabilities

Liabilities for expenses that have been incurred but have not yet been paid or recorded through a standard payment transaction.

Cash Payments

Transactions where payment is made using cash, as opposed to checks, credit cards, or electronic transfers.

Credit Sales

Transactions where the buyer is allowed to pay for goods or services at a later date, extending credit by the seller.