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Ottawa Landscaping fired its new bookkeeper due to concerns over the individual’s competence. You have been asked to complete the January 31, 20x3 year-end accounting process and prepare the year-end financial statements. You have gathered the following information to help complete the year-end accounting. Bank reconciliation The bookkeeper prepared the following incorrect bank reconciliation. The beginning balances are correct, and the amounts of the reconciling items are correct, but they have not been properly presented on the bank reconciliation. INCORRECT RECONCILIATION: Balance per bank $ 4,251 Balance per books $ 1,950 Add: Outstanding deposit 6,375 Add: Outstanding cheques 4,928 NSF cheque –R. Loud 685 Deduct: Note + $250 interest collected (5,250) Deduct: Bank service charges (35) Bank error (782) Total $ 6,061 Total $ 6,061 Additional information: 1. The $685 non-sufficient funds (NSF) cheque was received from R. Loud in settlement of an outstanding account receivable. 2. The $5,000 note plus $250 interest collected by the bank on behalf of Ottawa Landscaping was from Rost Company. Ottawa Landscaping had not previously made any journal entry with respect to the collection of the note receivable, or the interest related to the note. 3. The bank error was the result of the bank deducting $782 from Ottawa Landscaping's bank account for a $782 cheque that was written by another company, Ontario Landscaping Inc.

Ottawa Landscaping fired its new bookkeeper due to concerns over the individual’s competence. You have been asked to complete the January 31, 20x3 year-end accounting process and prepare the year-end financial statements. You have gathered the following information to help complete the year-end accounting. Bank reconciliation The bookkeeper prepared the following incorrect bank reconciliation. The beginning balances are correct, and the amounts of the reconciling items are correct, but they have not been properly presented on the bank reconciliation. INCORRECT RECONCILIATION: Balance per bank $ 4,251 Balance per books $ 1,950 Add: Outstanding deposit 6,375 Add: Outstanding cheques 4,928 NSF cheque –R. Loud 685 Deduct: Note + $250 interest collected (5,250) Deduct: Bank service charges (35) Bank error (782) Total $ 6,061 Total $ 6,061 Additional information: 1. The $685 non-sufficient funds (NSF) cheque was received from R. Loud in settlement of an outstanding account receivable. 2. The $5,000 note plus $250 interest collected by the bank on behalf of Ottawa Landscaping was from Rost Company. Ottawa Landscaping had not previously made any journal entry with respect to the collection of the note receivable, or the interest related to the note. 3. The bank error was the result of the bank deducting $782 from Ottawa Landscaping's bank account for a $782 cheque that was written by another company, Ontario Landscaping Inc.

Auditing: A Risk Based-Approach (MindTap Course List)
Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter10: Auditing Cash, Marketable Securities, And Complex Financial Instruments
Section: Chapter Questions
Problem 31CYBK
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 a.         Prepare the adjusting entries required for the cash account. Calculate the adjusted balance per books.

b.         Prepare a bank reconciliation as at January 31.

Ottawa Landscaping fired its new bookkeeper due to concerns over the individual's competence. You have been asked to complete the January 31, 20x3 year-end accounting process and prepare the year-end financial statements. You have gathered the following information to help complete the year-end accounting. Bank reconciliation The bookkeeper prepared the following incorrect bank reconciliation. The beginning balances are correct, and the amounts of the reconciling items are correct, but they have not been properly presented on the bank reconciliation. INCORRECT RECONCILIATION: Balance per bank $ 4,251 Balance per books $ 1,950 Add: Outstanding deposit 6,375 Add: Outstanding cheques 4,928 NSF cheque –R. Loud 685 Deduct: Note + $250 interest collected (5,250) Deduct: Bank service charges (35) Bank error (782) Total $ 6,061 Total $ 6,061 Additional information: 1. The $685 non-sufficient funds (NSF) cheque was received from R. Loud in settlement of an outstanding account receivable. 2. The $5,000 note plus $250 interest collected by the bank on behalf of Ottawa Landscaping was from Rost Company. Ottawa Landscaping had not previously made any journal entry with respect to the collection of the note receivable, or the interest related to the note. 3. The bank error was the result of the bank deducting $782 from Ottawa Landscaping's bank account for a $782 cheque that was written by another company, Ontario Landscaping Inc.
Transcribed Image Text:Ottawa Landscaping fired its new bookkeeper due to concerns over the individual's competence. You have been asked to complete the January 31, 20x3 year-end accounting process and prepare the year-end financial statements. You have gathered the following information to help complete the year-end accounting. Bank reconciliation The bookkeeper prepared the following incorrect bank reconciliation. The beginning balances are correct, and the amounts of the reconciling items are correct, but they have not been properly presented on the bank reconciliation. INCORRECT RECONCILIATION: Balance per bank $ 4,251 Balance per books $ 1,950 Add: Outstanding deposit 6,375 Add: Outstanding cheques 4,928 NSF cheque –R. Loud 685 Deduct: Note + $250 interest collected (5,250) Deduct: Bank service charges (35) Bank error (782) Total $ 6,061 Total $ 6,061 Additional information: 1. The $685 non-sufficient funds (NSF) cheque was received from R. Loud in settlement of an outstanding account receivable. 2. The $5,000 note plus $250 interest collected by the bank on behalf of Ottawa Landscaping was from Rost Company. Ottawa Landscaping had not previously made any journal entry with respect to the collection of the note receivable, or the interest related to the note. 3. The bank error was the result of the bank deducting $782 from Ottawa Landscaping's bank account for a $782 cheque that was written by another company, Ontario Landscaping Inc.
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