1. PART II: APPLICATION
Directions:
Please answer each of the following questions. Show your work
as necessary.
1. The following bank reconciliation contains several errors.
Bank Reconciliation
July 31, 20--
Bank Statement Balance
$ 9,057.00
Add: Note collected by bank
1,200.00
$10,257.00
Deduct: Outstanding checks
$596.00
Error in recording Ck. No. 462 (recorded
check for $546 rather than $456)
90.00
686.00
Adjusted Bank Statement Balance
$ 9,571.00

2. Ledger Balance of Cash
$ 8,366.00
Add: NSF check from customer
$ 60.00
Deposit in transit
941.00
1,001.00
$ 9,367.00
Deduct: Bank service and collection charges
14.00
Adjusted Ledger Balance of Cash
$ 9,353.00
Instructions:
Prepare a corrected bank reconciliation.
Bank Reconciliation
July 31, 20--
Bank Statement Balance
Add: Deposit in transit

3. Deduct: Outstanding checks
Adjusted Bank Statement Balance
Ledger Balance of Cash
Add: Note collected from customer
Deduct: Bank service and collection charges
Error in recording Ck. No. 462 (recorded
check for $546 rather than $456)
NSF check from customer
Adjusted Ledger Balance of Cash

4. 2. Capable Cleaners deposits all receipts in the bank each
evening and makes all payments by check. On March 31 its
ledger balance of cash is $983.40. The bank statement balance
of cash as of March 31 is $1,176.53. You are given the
following information with which to reconcile the bank
statement:
a.
A bank debit memo for service charges, $5.
b.
A deposit of $198.50 was placed in the night depository on
March 31 and did not appear on the bank statement.
c.
The reconciliation for February, the previous month, showed
two checks outstanding on February 28: Ck. No. 332 for $18
and Ck. No. 333 for $138.60. Ck. No. 333 was returned with the
March statement; however, Ck. No. 332 was not returned.
d.
A bank debit memo for a $4.17 NSF check written by L. Long.
e.
Checks no. 352 for $141.15, no. 355 for $17.50, and no. 356 for
$215.15 were written during March but were not returned by the
bank.
f.
The canceled checks were compared with the entries in the
check register, and it was observed that Ck. No. 348 for $56
was written correctly, payable to Glyn Company, a creditor, but
was recorded in the checkbook as $65.

5. Instructions:
1.
Prepare a bank reconciliation as of March 31, assuming that the
debit and credit memos have not been recorded.
2.
Record the necessary entries in general journal form using page
41.
1.)
Capable Cleaners
Bank Reconciliation
March 31, 20—
Bank Statement Balance
Add: Deposit in transit
Deduct: Outstanding checks
No. 332
No. 352
No. 355

6. No. 356
Adjusted Bank Statement Balance
Ledger Balance of Cash
Add: Error in recording Ck. No. 348 payable to
Glyn Company (recorded check for $9 too
much)
Deduct: Bank service and collection charges
NSF check from L. Long
Adjusted Ledger Balance of Cash

7. 2.)
GENERAL JOURNAL
PAGE
41
Date
Description
Post.
Ref.
Debit
Credit
20--
Adjusting Entries
Mar.
31
Cash
Accounts Payable
Error in recording Ck. No. 348

8. payable to Glyn Company.
31
Miscellaneous Expense
Cash
Service charge and collection
charge levied by the bank.

9. 31
Accounts Receivable
Cash
NSF check received from L. Long.

10. 3. Argee Co. maintains a Cash Short and Over account. During
May, Argee Co. had the following selected transactions:
May 1
Established a Change Fund for $100.00.
10
Recorded cash income from services: cash register tape,
$1,459.98; cash count, $1,557.60.
15
Established a Petty Cash Fund for $100.00.
31
Received a debit memo for $18.86 from the bank for an NSF
check signed by B. Webb, a customer.
31
From the bank reconciliation, it was noted that a $63.37 check
issued to Landro Company, a creditor, was previously recorded
as $36.73.
31
Recorded cash income from services: cash register tape,
$1,912.07; cash count, $2,012.65.
31
Issued a check to reimburse the Petty Cash Fund, $61.17. The
remaining cash in the fund is $38.83. From the petty cash
vouchers, payments were as follows: S. Argee, Drawing,
$35.50; Supplies Expense, $19.40; Miscellaneous Expense,
$6.27.
Instructions:
Record the transactions in general journal form on page 18.
4. On June 1 of this year, Estes and Company established a
Petty Cash Fund. The following petty cash transactions took
place during the month, and the fund has $165.00 remaining at
June 30.

11. June
1
Cashed check to establish Petty Cash Fund for $250.
3
Paid for mailing packages, $23.25, Voucher 1.
8
Bought memo pads and post-it-notes, $10.50, Voucher 2.
14
J. Estes, the owner, withdrew $20.00 for personal use, Voucher
3.
19
Paid $15.00 for window cleaning, Voucher 4.
22
Paid $8.75 for package delivery, Voucher 5.
28
Paid $5.50 for parking fee, Voucher 6.
30
Issued check to reimburse Petty Cash Fund.
Instructions:
1. Journalize the entry to establish the Petty Cash Fund in
general journal using page 9.
2. Record the disbursements of petty cash in the petty cash
payments record.
3. Journalize the summarizing entry to reimburse the Petty Cash
Fund.
1-3.)

12. GENERAL JOURNAL
PAGE
9
Date
Description
Post.
Ref.
Debit
Credit
20--
Adjusting Entries
June
1
Petty Cash Fund
Cash
establish petty cash fund

13. 30
Office Supplies
Maintenance Expense
Miscellaneous Expense
J. Estes, Drawing
Cash Short & Over

14. Cash
reimburse fund
2.)
Date
Vou. No.
Explanation
Payments
Office
Supplies
Maintenance
Exp.
Misc Exp.
Acct.
Other
Acct. Amount
3

15. 1
8
2
14
3
19
4
22

16. 5
28
6
30