The unadjusted cash account balance for Carson Company at December 31 is $12,615. The bank statement showed an ending balance of $18,250 at December 31. The following information is available from an examination of the bank statement and the company's accounting records:
Check #433 for the purchase of inventory was written correctly and paid by the bank correctly for $432, but was recorded on the books at $234. Carson uses the perpetual inventory system.Required:a) Determine the true cash balance by preparing a bank reconciliation as of December 31.b) Record in general journal form any necessary entries to the Cash account to adjust it to the true cash
balance.
What will be an ideal response?
a)
b)
b) Entries must be recorded for the adjustments to the unadjusted book balance so that the adjusted cash balance equals the true cash balance. Entries are not recorded for the adjustments to the unadjusted bank balance since these items are already reflected in the company's books.
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