Question Details

Management 1A Week 9 Quiz 8 CHAPTER 8 PART 11

Ex. 190
Sky Company is unable to reconcile the bank balance at January 31. Sky- reconciliation is as follows.

	Cash balance per bank	$5,300
	Add: NSF check	1,570
	Less: Bank service charge	      35
	Adjusted balance per bank	$6,835
	Cash balance per books	$5,705
	Less: Deposits in transit	750
	Add: Outstanding checks	  1,950
	Adjusted balance per books	$6,905
Instructions
(a)	Prepare a correct bank reconciliation.
(b)	Journalize the entries required by the reconciliation.



Ex. 191
On April 30, the bank reconciliation of Baxter Company shows three outstanding checks: no. 354, $650, no. 355, $820, and no. 357, $615. The May bank statement and the May cash payments journal show the following.

Bank Statement		Cash Payments Journal
                   Checks Paid                  			                Checks Issued               	
Date	Check No.	Amount		Date	Check No.	Amount
5/4	354	650		5/2	358	159
5/2	355	820		5/5	359	275
5/17	358	159		5/10	360	890
5/12	359	275		5/15	361	850
5/20	360	890		5/22	362	750
5/29	363	480		5/24	363	480
5/30	362	750		5/29	364	870
Ex. 191	(Cont.)
Instructions
Using step 2 in the reconciliation procedure, list the outstanding checks at May 31.


Ex. 192
The information below relates to the Cash account in the ledger of Lee Company.

	Balance September 1—$25,725; Cash deposited—$96,000.
	Balance September 30—$22,225; Checks written—$99,500.

The September bank statement shows a balance of $24,635 on September 30 and the following memoranda.

	Credits			Debits		
Collection of $4,250 note plus interest $50	$4,300	NSF check: J. E. Hoover	$735
Interest earned on checking account	$40	Safety deposit box rent	$75

At September 30, deposits in transit were $4,695, and outstanding checks totaled $3,575.

Instructions
Prepare the bank reconciliation at September 30.


Ex. 193
The cash records of Jasmin Company show the following four situations.

1.	The June 30 bank reconciliation indicated that deposits in transit total $2,110. During July the general ledger account Cash shows deposits of $23,620, but the bank statement indicates that only $23,400 in deposits were received during the month.

2.	The June 30 bank reconciliation also reported outstanding checks of $1,250. During the month of July, Jasmin Company books show that $25,800 of checks were issued. The bank statement showed that $24,600 of checks cleared the bank in July.

3.	In September, deposits per the bank statement totaled $40,100, deposits per books were $38,100, and deposits in transit at September 30 were $2,900.

4.	In September, cash disbursements per books were $36,550, checks clearing the bank were $37,500, and outstanding checks at September 30 were $3,200.

There were no bank debit or credit memoranda. No errors were made by either the bank or Jasmin Company.

Instructions
Answer the following questions.

(a) In situation (1), what were the deposits in transit at July 31?
(b) In situation (2), what were the outstanding checks at July 31?
(c) In situation (3), what were the deposits in transit at August 31?
(d) In situation (4), what were the outstanding checks at August 31?


Ex. 194
Lyleen Boat Company's bank statement for the month of September showed a balance per bank of $7,000. The company's Cash account in the general ledger had a balance of $5,459 at September 30. Other information is as follows:
(1)	Cash receipts for September 30 recorded on the company's books were $5,700 but this amount does not appear on the bank statement.
(2)	The bank statement shows a debit memorandum for $40 for check printing charges.
(3)	Check No. 119 payable to Mann Company was recorded in the cash payments journal and cleared the bank for $248. A review of the accounts payable subsidiary ledger shows a $36 credit balance in the account of Mann Company and that the payment to them should have been for $284.
(4)	The total amount of checks still outstanding at September 30 amounted to $5,000.
(5)	Check No. 138 was correctly written and paid by the bank for $409. The cash payment journal reflects an entry for Check No. 138 as a debit to Accounts Payable and a credit to Cash in Bank for $490.
(6)	The bank returned an NSF check from a customer for $360.
(7)	The bank included a credit memorandum for $2,560 which represents collection of a customer's note by the bank for the company; principal amount of the note was $2,500 and interest was $60. Interest has not been accrued.

Instructions
(a)	Prepare a bank reconciliation for Lyleen Boat Company at September 30.
(b)	Prepare any adjusting entries necessary as a result of the bank reconciliation.


Ex. 195
Bell Food Store developed the following information in recording its bank statement for the month of March.
	Balance per books March 31	$  3,664
	Balance per bank statement March 31	$10,900
———————————————————————————————————————————
(1)	Checks written in March but still outstanding $7,000.
(2)	Checks written in February but still outstanding $3,100.
(3)	Deposits of March 30 and 31 not yet recorded by bank $5,200.
(4)	NSF check of customer returned by bank $1,200.
(5)	Check No. 210 for $593 was correctly issued and paid by bank but incorrectly entered in the cash payments journal as payment on account for $539.
Ex. 195	(Cont.)
(6)	Bank service charge for March was $50.
(7)	A payment on account was incorrectly entered in the cash payments journal and posted to the accounts payable subsidiary ledger for $824 when Check No. 318 was correctly prepared for $284. The check cleared the bank in March.
(8)	The bank collected a note receivable for the company for $3,000 plus $100 interest revenue.

Instructions
Prepare a bank reconciliation at March 31.


Ex. 196
Using the code letters below, indicate how each of the items listed would be handled in preparing a bank reconciliation. Enter the appropriate code letter in the space to the left of each item.

	Code
	A	Add to cash balance per books
	B	Deduct from cash balance per books
	C	Add to cash balance per bank
	D	Deduct from cash balance per bank
	E	Does not affect the bank reconciliation

Items:
		1.	Outstanding checks.

		2.	Bank service charge.

		3.	Check for $420 correctly written and paid by the bank but incorrectly entered in the cash payments journal for $240.

		4.	Deposit in transit.

		5.	Bank returns deposited check marked NSF.
Ex. 196	(Cont.)

		6.	Bank collects notes receivable and interest for depositor.

		7.	Bank debit memorandum for check printing fees.

		8.	Petty cash custodian has $91 in paid petty cash vouchers that have not been reimbursed.

		9.	Bank charged a check against the company which should have been charged to another company.

		10.	A check for $246 was correctly paid by the bank but was incorrectly entered in the cash payments journal for $264.

Ex. 197
The following adjusting entries for Donkey Company were prepared after completing a bank reconciliation. For each of the following adjustments, prepare a probable explanation for the adjusting entry.

1.	Supplies		180
		Cash			180

2.	Accounts Receivable—B. Borke		460
		Cash			460

3.	Cash			2,240
		Notes Receivable			2,000
		Interest Revenue			240

4.	Sales		72
		Cash			72

5.	Miscellaneous Expense		18
		Cash			18


Ex. 198
The cash balance per books for Feagen Company on September 30, 2012 is $10,740.93. The following checks and receipts were recorded for the month of October, 2012:

	Checks			Receipts	
No.	 Amount 	No.	 Amount   	Amount 	Date 
17	$372.96	22	$   578.84	$843.86	10/  5
18	$780.62	23	$1,687.50	$941.54	10/21
19	$157.00	24	$   921.30	$808.58	10/27
20	$587.50	25	$   246.03	$967.00	10/30
21	$234.15

In addition, the bank statement for the month of October is presented below:
	Balance	  Deposits and Credits	Checks and Debits 	Balance 
	Last Statement	No.	Total Amount	No.	Total Amount	This Statement
	————————————————————————————————————————
	$5,404.84	5	$9,178.36	10	$3,632.19	$10,951.01
	————————————————————————————————————————
	Checks and other debits 	Deposits	Date	Balance
	———————————————————————
	No.	Amount	No.	Amount	No.	Amount 
	————————————————————————————————————————
	14	148.29	17	372.96	22	578.84	5,484.38	10/  1	$9,875.31
	18	708.62	24	921.30			843.86	10/  8	$9,219.03
	19	157.00	25	246.03			941.54	10/23	$9,541.58
	21	234.15		25.00	SC		808.58	10/29	$10,101.01
		240.00	NSF				1,100.00	CM	10/31	$10,951.01
	————————————————————————————————————————
	Symbols:  NSF (Not sufficient funds)    SC  (Service charge)    CM  (Credit Memo) 
	————————————————————————————————————————

Check No. 18 was correctly written for $708.62 for a payment on account. The NSF check was from S. Long, a customer, in settlement of an accounts receivable. An entry had not been made for the NSF check. The credit memo is for the collection of a note receivable including interest of $60 which has not been accrued. The bank service charge is $25.00.
 
Ex. 198	(Cont.)
Instructions
(a)	Prepare a bank reconciliation at October 31.
(b)	Prepare the adjusting journal entries required by the bank reconciliation.

Ex. 199
Riley Company received a notice with its bank statement that the bank had collected a note receivable for $5,000 plus $150 of interest. The bank had credited these amounts to Riley 's account less a collection fee of $10. Riley Company had already accrued the interest for this note on its books.
(a)	How will these items affect Riley Company's bank reconciliation?
(b)	Prepare the journal entry that Riley Company will make to record this information on its books.


Ex. 200
The cash records of Mercury Company show the following:
1.	The June 30 bank reconciliation indicated that deposits in transit totaled $790. During July the general ledger account Cash shows deposits of $9,800, but the bank statement indicates that only $8,240 in deposits were received during the month.
2.	The June 30 bank reconciliation also reported outstanding checks of $1,200. During the month of July, Mercury Company books show that $11,570 of checks were issued, yet the bank statement showed that $11,100 of checks cleared the bank in July.

There were no bank debit or credit memoranda and no errors were made by either the bank or Mercury Company.

Answer the following questions:
(a)	What were the deposits in transit at July 31?
(b)	What were the outstanding checks at July 31?


Ex. 201
Indicate how each of the following items would be shown on a bank reconciliation.
1.	Bank error (The bank charged our account with another company's check)
2.	Check printing charge	
3.	Deposits in transit
4.	Note collected by the bank
5.	NSF checks
6.	Outstanding checks


Ex. 202
The cash records of Barry Company show the following:
1.	In September, deposits per the bank statement totaled $38,600; deposits per books $39,000; and deposits in transit at September 30 were $4,600.
2.	In September, cash disbursements per books were $36,500; checks clearing the bank were $39,800; and outstanding checks at September 30 were $3,100.

There were no bank debit or credit memoranda and no errors were made by either the bank or Barry Company.

Answer the following questions:
(a)	What were the deposits in transit at August 31?
(b)	What were the outstanding checks at August 31?


Ex. 203
Listed below are items that may be useful in preparing the March 2014, bank reconciliation for Walker Machine Works.

Using the following code, insert in the space before each item the letter where the amount would be located or otherwise treated in the bank reconciliation process.
	Code	Located or Treated
	A	Add to the cash balance per books
	B	Deduct from the cash balance per books
	C 	Add to the cash balance per bank
	D	Deduct from the cash balance per bank
	E	Does not affect the bank reconciliation
		1.	Included with the bank statement materials was a check from Bob Simpson for $40 stamped "account closed."
		2.	A personal deposit by Annie Walker to her personal account in the amount of $300 for dividends on her General Electric common stock was credited to the company account.
		3.	The bank statement included a debit memorandum for $22.00 for two books of blank checks for Walker Machine Works.
		4.	The bank statement contains a credit memorandum for $24.75 interest on the average checking account balance.
		5.	The daily deposits of March 30 and March 31, for $3,362 and $3,125 respectively, were not included in the bank statement postings.
		6.	Two checks totaling $316.86, which were outstanding at the end of February, cleared in March and were returned with the March statement.
		7.	The bank statement included a credit memorandum dated March 28, 2014, for $45.00 for the monthly interest on a 6-month, $15,000 certificate of deposit that the company owns.
 
Ex. 203	(Cont.)
		8.	Four checks, #8712, #8716, #8718, #8719, totaling $5,369.65, did not clear the bank during March.
		9.	On March 24, 2014, Walker Machine Works delivered to the bank for collection a $2,500, 3-month note from Don Decker. A credit memorandum dated March 29, 2014, indicated the collection of the note and $90.00 of interest.
		10.	The bank statement included a debit memorandum for $25.00 for the collection service on the above note and interest.


Ex. 204
The following information was used to prepare the March 2014, bank reconciliation for Walker Machine Works. Identify the items that require adjustment to the cash balance per books and prepare the appropriate adjusting entries.
	1.	Included with the bank statement materials was a check from Bob Simpson for $40 stamped "NSF."
	2.	A personal deposit by Annie Walker to her personal account in the amount of $300 for dividends on her General Electric common stock was credited to the company account.
	3.	The bank statement included a debit memorandum for $22.00 for two books of blank checks for Walker Machine Works.
	4.	The bank statement contains a credit memorandum for $24.75 interest on the average checking account balance.
	5.	The daily deposits of March 30 and March 31, for $3,362 and $3,125 respectively, were not included in the bank statement postings.
	6.	Two checks totaling $316.86, which were outstanding at the end of February, cleared in March and were returned with the March statement.
	7.	The bank statement included a credit memorandum dated March 28, 2012, for $45.00 for the monthly interest on a 6-month, $15,000 certificate of deposit that the company owns.
	8.	Four checks, #8712, #8716, #8718, #8719, totaling $5,369.65, did not clear the bank during March.
	9.	On March 24, 2012, Walker Machine Works delivered to the bank for collection a $4,500, 
3-month note from Don Decker. A credit memorandum dated March 29, 2012, indicated the collection of the note and $90.00 of interest.
	10.	The bank statement included a debit memorandum for $25.00 for the collection service on the above note and interest.


Ex. 205
Compute Whiz Company- adjusted cash balance per books based on the following information: 
Beginning cash balance per books	$4,200 Deposit in transit	900 Check printing charge	20 Note collected by bank for Whiz	1,600