A Company's Records Indicate the Balance in Its Chequing Account

question 33

Essay

A company's records indicate the balance in its chequing account at the end of the month is $5,671.Comparing the company's records with the monthly bank statement reveals several additional cash transactions,such as a bank service charge of $75,a $4,000 note receivable collected by the bank plus interest earned of $100,and an NSF cheque for $350.Determine the company's adjusted cash balance and prepare the journal entries necessary to adjust the account balance.

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Definitions:

Consolidated Net Income

The total net income of a parent company and its subsidiaries after eliminating intercompany transactions, presented as a single figure.

Downstream Transfer

Transactions where a parent company sells or transfers assets to its subsidiary.

Straight-Line Method

An accounting method of depreciation where the value of a fixed asset is reduced uniformly over its useful life.

Consolidated Financial Statement

Financial statements that aggregate the financial position and operational results of a parent company and its subsidiaries.