Cash Flow

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Bank Reconciliation Statement

Balance per Bank Statement $26,830


Add: Deposit in Transit $13,420
Less: Outstanding Checks
Check #8700 $985
Check #8709 $12,600
Check #8801 $620
Check #8815 $145
Total Outstanding Checks $14,350
Adjusted Bank Balance $25,900

Balance per Company's Books $5,575


Add: Customer Deposits Outstanding (c) $14,680
Less: Bank Service Charges (f) $65
Less: Bank Service Fee (i) $50
Less: Incorrect Recording of Customer's Check (g) $450
Less: Incorrect Recording of B-Zone Networks Check (e) $2,350
Less: Incorrect Recording of Decker Company Payment (h) $360
Adjusted Book Balance $17,980

Reconciliation:
Adjusted Bank Balance $25,900
Adjusted Book Balance $16,980

Adjusted Bank Balance = Balance per Bank Statement + Deposits in Transit -


Outstanding Checks - Other Adjustments
In the provided table, the adjusted bank balance is calculated as follows:
• Start with the balance per bank statement: $26,830.
• Add the deposit in transit: $13,420.
• Subtract the total amount of outstanding checks: $985 (Check #8700) +
$12,600 (Check #8709) + $620 (Check #8801) + $145 (Check #8815) = $14,350.
• Add or subtract any other adjustments listed in the bank reconciliation
statement.
By following this calculation, you'll arrive at the adjusted bank balance, which
represents the reconciled balance of the bank account as of the statement date.

Adjusted Book Balance = Balance per Company's Books + Deposits Outstanding - Bank
Service Charges - Other Adjustments
In the provided information, let's break down the adjustments:
• Start with the balance per the company's books: $5,575.
• Add the customer deposits outstanding: $14,680.
• Subtract bank service charges: $65.
• Subtract bank service fee: $50.
• Subtract the incorrect recording of customer's check: $450.
• Subtract the incorrect recording of B-Zone Networks check: $2,350.
• Subtract the incorrect recording of Decker Company payment: $260.
Now, let's plug in these values into the formula:
Adjusted Book Balance = $5,575 + $14,680 - $65 - $50 - $450 - $2,350 - $260
Adjusted Book Balance = $16,980

B.
Prepare the necessary entries to make the cash account agree with the bank
reconciliation adjusted cash balance as of October 31

Journal Entries Debit (Dr) Credit (Cr)


Adjustment for Deposits in Transit Cash account Deposits in Transit
Adjustment for Outstanding Checks Outstanding Checks Cash account
Adjustment for Bank Service Charges Bank Service Charges Expense Cash account
Adjustment for Incorrect Recording of Customer's Check Cash account
Customers' Account
Adjustment for Incorrect Recording of B-Zone Networks CheckCash account B-Zone
Networks Account
Adjustment for Incorrect Recording of Decker Company Payment Cash account
Decker Company Account

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