The following information is available to reconcile Cloy Company’s book balance of cashwith its bank statement cash balance as of June 30. The June 30 cash balance according to theaccounting records is $58,542, and the bank statement cash balance for that date is $68,047a. The bank erroneously cleared a $395 check against the account in June that was not issued byCloy. The check documentation included with the bank statement indicates the check wasactually issued by Clare Co.b. On June 30, the bank issued a credit memorandum for $35 interest earned on Cloy’s account.c. When the June checks are compared with entries in the accounting records, it is found thatCheck No. 1727 had been correctly drawn for $1,450 to pay for advertising but was erroneouslyentered in the accounting records as $1,540.d. A credit memorandum indicates that the bank collected $9,000 cash on a note receivable forCloy, deducted a $30 collection fee, and credited the balance to the company’s Cash account.Cloy did not record this transaction before receiving the statement.e. A debit memorandum of $895 is enclosed with the bank statement for an NSF check for $870received from a customer. The bank assessed a $25 fee for processing it.f. Cloy’s June 30 daily cash receipts of $6,325 were placed in the bank’s night depository on thatdate, but do not appear on the June 30 bank statement.g. Cloy’s June 30 cash disbursements journal indicates that Check No. 1737 for $4,830 andCheck No. 1740 for $3,280 were both written and entered in the accounting records, but are notamong the canceled checks.h. A debit memorandum for $85.00 indicates the bank deducted the annual lock box fee for thecompany.1. Prepare the bank reconciliation for this company as of June 30.2. Prepare the journal entries necessary to bring the company’s book balance of cash intoconformity with the reconciled cash balance as of June 30.
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