ACCT 211 Week 4 Chapter 6 Problem

ACCT 211 Week 4 Chapter 6 Problem | Accounting Assignment Help | Liberty University  

Chapter 6 Problems

·         Question 1

Kiona Co. set up a petty cash fund for payments of small amounts. The following transactions involving the petty cash fund occurred in May (the last month of the company's fiscal year).
 

 
Required:
1. Prepare journal entries to establish the fund on May 1, to replenish it on May 15 and on May 31, and to reflect any increase or decrease in the fund balance on May 16 and May 31. (Round your answers to 2 decimal places.)
 

·         Question 2

Nakashima Gallery had the following petty cash transactions in February of the current year.

 
Required:
1. Prepare the journal entry to establish the petty cash fund.
2. Prepare a petty cash payments report for February with these categories: delivery expense, mileage expense, postage expense, merchandise inventory (for transportation-in), and office supplies expense. Sort the payments into the appropriate categories and total the expenditures in each category.
3. Prepare the journal entries for required 2 to both (a) reimburse and (b) increase the fund amount.

·         Question 3

The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31, 2017.

1. On July 31, the company’s Cash account has a $25,866 debit balance, but its July bank statement shows a $28,484 cash balance.
2. Check No. 3031 for $1,640 and Check No. 3040 for $812 were outstanding on the June 30 bank reconciliation. Check No. 3040 is listed with the July canceled checks, but Check No. 3031 is not. Also, Check No. 3065 for $596 and Check No. 3069 for $2,408, both written in July, are not among the canceled checks on the July 31 statement.
3. In comparing the canceled checks on the bank statement with the entries in the accounting records, it is found that Check No. 3056 for July rent expense was correctly written and drawn for $1,220 but was erroneously entered in the accounting records as $1,210.
4. The July bank statement shows the bank collected $9,000 cash on a noninterest-bearing note for Branch, deducted a $45 collection expense, and credited the remainder to its account. Branch had not recorded this event before receiving the statement.
5. The bank statement shows an $805 charge for a $795 NSF check plus a $10 NSF charge. The check had been received from a customer, Evan Shaw. Branch has not yet recorded this check as NSF.
6. The July statement shows a $14 bank service charge. It has not yet been recorded in miscellaneous expenses because no previous notification had been received.
7. Branch’s July 31 daily cash receipts of $10,152 were placed in the bank’s night depository on that date but do not appear on the July 31 bank statement.

Required:
 
1. Prepare the bank reconciliation for this company as of July 31, 2017.

·         Question 4

The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31, 2017.

1. On July 31, the company’s Cash account has a $25,866 debit balance, but its July bank statement shows a $28,484 cash balance.
2. Check No. 3031 for $1,640 and Check No. 3040 for $812 were outstanding on the June 30 bank reconciliation. Check No. 3040 is listed with the July canceled checks, but Check No. 3031 is not. Also, Check No. 3065 for $596 and Check No. 3069 for $2,408, both written in July, are not among the canceled checks on the July 31 statement.
3. In comparing the canceled checks on the bank statement with the entries in the accounting records, it is found that Check No. 3056 for July rent expense was correctly written and drawn for $1,220 but was erroneously entered in the accounting records as $1,210.
4. The July bank statement shows the bank collected $9,000 cash on a noninterest-bearing note for Branch, deducted a $45 collection expense, and credited the remainder to its account. Branch had not recorded this event before receiving the statement.
5. The bank statement shows an $805 charge for a $795 NSF check plus a $10 NSF charge. The check had been received from a customer, Evan Shaw. Branch has not yet recorded this check as NSF.
6. The July statement shows a $14 bank service charge. It has not yet been recorded in miscellaneous expenses because no previous notification had been received.
7. Branch’s July 31 daily cash receipts of $10,152 were placed in the bank’s night depository on that date but do not appear on the July 31 bank statement.

2. Prepare the journal entries necessary to bring the company’s book balance of cash into conformity with the reconciled cash balance as of July 31, 2017. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

·         Question 5

Chavez Company most recently reconciled its bank statement and book balances of cash on August 31 and it reported two checks outstanding, No. 5888 for $1,010 and No. 5893 for $501. The following information is available for its September 30, 2017, reconciliation.
 

From the September 30 Bank Statement
 

 
From Chavez Company’s Accounting Records
 

   
Additional Information
Check No. 5904 is correctly drawn for $2,086 to pay for computer equipment; however, the recordkeeper misread the amount and entered it in the accounting records with a debit to Computer Equipment and a credit to Cash of $2,047. The NSF check shown in the statement was originally received from a customer, S. Nilson, in payment of her account. Its return has not yet been recorded by the company. The credit memorandum is from the collection of a $1,510 note for Chavez Company by the bank. The bank deducted a $19 collection fee. The collection and fee are not yet recorded.

Required:
 
1. Prepare the September 30, 2017, bank reconciliation for this company.

·         Question 6

Chavez Company most recently reconciled its bank statement and book balances of cash on August 31 and it reported two checks outstanding, No. 5888 for $1,010 and No. 5893 for $501. The following information is available for its September 30, 2017, reconciliation.
 

From the September 30 Bank Statement
 

 
From Chavez Company’s Accounting Records
 

   
Additional Information
Check No. 5904 is correctly drawn for $2,086 to pay for computer equipment; however, the recordkeeper misread the amount and entered it in the accounting records with a debit to Computer Equipment and a credit to Cash of $2,047. The NSF check shown in the statement was originally received from a customer, S. Nilson, in payment of her account. Its return has not yet been recorded by the company. The credit memorandum is from the collection of a $1,510 note for Chavez Company by the bank. The bank deducted a $19 collection fee. The collection and fee are not yet recorded.

2. Prepare the journal entries to adjust the book balance of cash to the reconciled balance. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)