Student Name: Class: Problem 08-04A BRANCE COMPANY Bank Reconciliation July 31, 2008 Bank statement balance

Add: Deposit of July 31 Total Deduct: Outstanding Checks: 3031 3065 3069 Adjusted bank balance Book balance Add: Proceeds of note less collection charge Deduct: NSF check Service charge Error (Check no. 3056) Adjusted book balance

$1,482.00 382.00 2,281.00

$795.00 35.00 20.00

BRANCE COMPANY General Journal Date Jul 31 Account Title Cash Collection Expense Notes Receivable Accts. Rec.-E. Shaw Cash Miscellaneous Expenses Cash Rent Expense Cash Debit 7,955 45 805 25 20

31 31 31

For each of the following errors, explain the effect on (i) the adjusted

bank statement cash balance and (ii) the adjusted cash account book balance. a. Unadjusted cash balance of $27,497 is listed on reconciliation as $26,947. b. Collection of $8,000 note less $45 collection fee is added to bank statement cash balance on reconciliation. a-i) i) The final balance that results from adjusting the bank statement balance will

not be affected by the error a-ii) The final balance that results from adjusting the book balance of cash will be overstated by $450 ($27,947 - $27,497), and the bank reconciliation will not balance b-i) The final balance that results from adjusting the bank statement balance will be overstated by $7,955 b-ii) The final balance that results from adjusting the book balance will be understated by $7,955

$27,233.00 11,514.00 $38,747.00

4,145.00 $34,602.00 $27,497.00 $7,955.00 $35,452.00

- Correct!

$850.00 $34,602.00

- Correct!

Credit

8,000 805 25 20

- Correct!

- Correct!

- Correct!

- Correct!