ACC – Backhaus Company Problem

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Description

AP7-4A

The bank portion of the bank reconciliation for Backhaus Company at November 30, 2011, was as follows.

BACKHAUS COMPANY

Bank Reconciliation

November 30, 2011

Cash balance per bank

$28,735.80

Add: Deposits in transit

5,060.40

33,796.20

Less: Outstanding checks

Check Number

Check Amount

3451

$4,520.80

3470

1,440.20

3471

1,689.00

3472

2,853.60

3474

2,100.00

12,603.60

Adjusted cash balance per bank

$21,192.60

The adjusted cash balance per bank agreed with the cash balance per books at November 30. The December bank statement showed the following checks and deposits.

Bank Statement

Checks

Deposits

Date

Number

Amount

Date

Amount

12-1

3451

$4,520.80

12-1

$5,060.40

12-2

3471

1,689.00

12-4

2,423.20

12-7

3472

2,853.60

12-8

4,730.20

12-4

3475

3,281.40

12-16

5,345.40

12-8

3476

2,600.00

12-21

5,890.00

12-10

3477

4,260.00

12-26

5,134.60

12-15

3479

6,160.00

12-29

5,672.00

12-27

3480

1,200.00

12-30

2,050.00

12-30

3482

951.00

Total

$36,305.80

12-29

3483

2,280.00

12-31

3485

1,081.60

$30,877.40

The cash records per books for December showed the following.

Cash Receipts

Cash Payments Journal

Journal

Date

Number

Amount

Date

Number

Amount

Date

Amount

12-1

3475

$3,281.40

12-20

3482

$951.00

12-3

$2,423.20

12-2

3476

2,600.00

12-22

3483

2,280.00

12-7

4,730.20

12-2

3477

4,260.00

12-23

3484

1,596.00

12-15

5,345.40

12-4

3478

1,242.60

12-24

3485

901.60

12-20

5,908.00

12-8

3479

6,160.00

12-30

3486

3,779.00

12-25

5,134.60

12-10

3480

1,200.00

Total

$29,866.40

12-28

5,672.00

12-17

3481

1,614.80

12-30

2,050.00

12-31

3,380.80

Total

$34,644.20

The bank statement contained two memoranda:

1.

A credit of $8,290.00 for the collection of a $8,000.00 note for Backhaus Company plus interest of $320.00 and less a collection fee of $30.00. Backhaus Company has not accrued any interest on the note.

2.

A debit of $1,145.60 for an NSF check written by D. Chagnon, a customer. At December 31, the check had not been redeposited in the bank.

At December 31 the cash balance per books was $24,970.40, and the cash balance per the bank statement was $40,308.60. The bank did not make any errors, but two errors were made by Backhaus Company.

 

Prepare the adjusting entries based on the reconciliation. (Hint: The correction of any errors pertaining to recording checks should be made to Accounts Payable. The correction of any errors relating to recording cash receipts should be made to Accounts Receivable.)(For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)

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