The bookkeeperat Hopkins Company has not reconciled the bank statement with the cash account, saying instead, "I don't have time." You have been asked to prepare a reconciliation and review procedures with the bookkeeper.
The April 30, 2018, bank statement and the April ledger accounts for cash showed the following (Summarized):
Bank Statement
Cheques Deposits Balance Balance, April 1,2018 $31,000 Deposits during April $36,100 67,100 Notes Collected for company (including $70 interest) 1,180 68,280 Cheques cleared during April $44,500 23,780 NSF cheque-A. B. Wright 160 23,620 Bank service charges 70 23,550 Balance, April 30, 2018 23,550
Cash in Bank
Apr. 1 Balance 23,500 Apr. Cheques written 41,000 Apr. Deposits 41,500
Cash on Hand
Apr. 30 Balance 100
A company of cheques written before and during April whththe cheques cleared through the bank showed that cheques of $4,100 are still outstanding at April 30. No seposits in transit were carried over from March, but a deposit was in transit at April 30.
Required:
1. Prepare a detailed bank reconciliation at April30, 2018.
2. Prepare any required journal entries as a result of the reconciliation. Why are they necessary?
3. What were the balances in the cash accounts in the ledger on May 1, 2018?
4. What total amount of cash should be reported on the statement of financial position at April 30. 2018.
Please answer all the questions, espicially, question 3 and 4 because I put this question before but the professor who answered it did not answer all of them.
The bookkeeperat Hopkins Company has not reconciled the bank statement with the cash account, saying instead, "I don't have time." You have been asked to prepare a reconciliation and review procedures with the bookkeeper.
The April 30, 2018, bank statement and the April ledger accounts for cash showed the following (Summarized):
Bank Statement
| Cheques | Deposits | Balance | |
|---|---|---|---|
| Balance, April 1,2018 | $31,000 | ||
| Deposits during April | $36,100 | 67,100 | |
| Notes Collected for company (including $70 interest) | 1,180 | 68,280 | |
| Cheques cleared during April | $44,500 | 23,780 | |
| NSF cheque-A. B. Wright | 160 | 23,620 | |
| Bank service charges | 70 | 23,550 | |
| Balance, April 30, 2018 | 23,550 |
Cash in Bank
| Apr. 1 Balance 23,500 | Apr. Cheques written 41,000 |
| Apr. Deposits 41,500 |
Cash on Hand
| Apr. 30 Balance 100 |
A company of cheques written before and during April whththe cheques cleared through the bank showed that cheques of $4,100 are still outstanding at April 30. No seposits in transit were carried over from March, but a deposit was in transit at April 30.
Required:
1. Prepare a detailed bank reconciliation at April30, 2018.
2. Prepare any required journal entries as a result of the reconciliation. Why are they necessary?
3. What were the balances in the cash accounts in the ledger on May 1, 2018?
4. What total amount of cash should be reported on the statement of financial position at April 30. 2018.
Please answer all the questions, espicially, question 3 and 4 because I put this question before but the professor who answered it did not answer all of them.
Related questions
The bank reconciliation prepared by Gemma Tours on March 31,2017, appeared as follows:
| Gemma Tours | ||||
| Bank Reconciliation | ||||
| March 31, 2017 | ||||
| Bank statementbalance | $15,500 | Book balance | $34,257 | |
| Add: | ||||
| Deposit of March 31 in transit | 22,044 | |||
| $37,544 | ||||
| Deduct: | ||||
| Outstanding cheques: | ||||
| #79 | $1,306 | |||
| #84 | 1,981 | 3,287 | ||
| Adjusted bankbalance | $34,257 | Adjusted bookbalance | $34,257 | |
The Cash account in the General Ledger appeared as follows on April30:
| Cash | Acct. No.101 | ||||
| Date | Explanation | PR | Debit | Credit | Balance |
| 2017 | |||||
| March 31 | Balance | 34,257.00 | |||
| April 30 | CR11 | 35,645.00 | 69,902.00 | ||
| 30 | CD14 | 45,533.00 | 24,369.00 | ||
A list of deposits made and cheques written during April, takenfrom the Cash Receipts Journal and Cash Disbursements Journal, isshown below:
| Deposits Made | |
| April 7 | $14,865.00 |
| 13 | 892.00 |
| 18 | 14,272.00 |
| 23 | 994.00 |
| 27 | 1,981.00 |
| 30 | 2,641.00 |
| Total April CashReceipts | $35,645.00 |
| Cheques Written | |
| No.91 | $ 1,256 |
| 92 | 5,475 |
| 93 | 2,590 |
| 94 | 3,613 |
| 95 | 3,033 |
| 96 | 1,895 |
| 97 | 8,862 |
| 98 | 3,033 |
| 99 | 8,982 |
| 100 | 6,794 |
| Total April CashDisbursements | $45,533 |
The following bank statement is available for April: (Note: Thebank deposits interest into the bank account at the end of everymonth.)
| Bank Statement | |||||
| To:Gemma Tours | April 30, 2017 Bank of Montreal | ||||
| Cheques/Charges | Deposits/Credits | Balance | |||
| 15,500 | |||||
| #93 | 04/02 | 2,509 | 04/03 | 22,044 | 35,035 |
| #92 | 04/07 | 5,475 | 04/07 | 14,865 | 44,425 |
| #84 | 04/13 | 1,981 | 04/13 | 892 | 43,336 |
| NSF | 04/18 | 6,876 | 04/18 | 14,272 | 50,732 |
| #95 | 04/23 | 3,033 | 04/23 | 994 | 48,693 |
| #99 | 04/27 | 8,982 | 04/27 | 1,981 | 41,692 |
| #96 | 04/30 | 1,895 | 04/30 | 2,641 | 42,438 |
| #97 | 04/30 | 8,862 | INT | 46 | 33,622 |
| #94 | 04/30 | 3,613 | 30,009 | ||
| PMT | 04/30 | 9,861 | 20,148 | ||
| INT | 04/30 | 35 | 20,113 | ||
| SC | 04/30 | 55 | 20,058 | ||
| NSF = NotSufficient Funds | SC =Service Charge | PMT =Principal Payment | INT =Interest | ||
In reviewing cheques returned by the bank, the bookkeeperdiscovered that cheque #93, for delivery expense, was recorded inthe Cash Disbursements Journal incorrectly as $2,590. The NSFcheque was that of customer Laura Clark, deposited in April.
Required:
a. Prepare a bank reconciliation at April 30.
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b. Prepare the necessary journal entries tobring the General Ledger Cash account into agreement with theadjusted balance on the bank reconciliation.
Journal entry worksheet
Record interest earned.
Note: Enter debits before credits.
|
Journal entry worksheet
Record to account for error in Cheque #93.
Note: Enter debits before credits.
Journal entry worksheet Record to reinstate customer account. Note: Enter debits before credits.
|
Bank Reconciliation The bank reconciliation made by Sandler Company, a sole proprietorship, on March 31 showed:
| Deposit in transit of | $1,320 | |
| Outstanding checks | no.797 | $540 |
| no.804 | $1,068 | |
| The reconciled cash balance on March 31 was | $14,064 |
The following bank statement is available for April 2012.
| Bank Statement | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| TO | Sandler Company | April 30 | |||||||||||
| Fairbanks, AK | FAIRBANKS NATIONAL BANK | ||||||||||||
| Date | Deposits | No. | Date | Charges | Date | Balance | |||||||
| Apr. | 1 | $1,320 | 804 | Apr. | 2 | $1,068 | Mar. | 31 | $14,352 | ||||
| 3 | 2,016 | 807 | 3 | 876 | Apr. | 1 | 15,672 | ||||||
| 7 | 1,500 | 808 | 7 | 1,368 | 2 | 14,604 | |||||||
| 13 | 1,224 | 809 | 7 | 1,006 | 3 | 15,744 | |||||||
| 18 | 1,008 | 810 | 16 | 1,248 | 7 | 14,870 | |||||||
| 23 | 948 | 811 | 13 | 391 | 13 | 15,703 | |||||||
| 27 | 1,608 | 813 | 27 | 648 | 16 | 14,455 | |||||||
| 30 | 1,392 | 814 | 23 | 720 | 18 | 14,863 | |||||||
| 30 IN | 72 | NSF | 18 | 600 | 23 | 15,091 | |||||||
| SC | 30 | 48 | 27 | 16,051 | |||||||||
| 30 | 17,467 | ||||||||||||
| Item codes | EC: Error Correction | DM: Debit Memo | CM: Credit Memo | ||||||||||
| SC: Service Charge | OD: Overdraft | RT: Returned Item | |||||||||||
| IN: Interest Earned | NSF: Non-sufficient Funds | ||||||||||||
A list of deposits made and checks written during April is shown below:
| Deposits Made | Checks Written | |||||
|---|---|---|---|---|---|---|
| Apr. | 2 | $2,016 | No. | 807 | $876 | |
| 6 | 1,500 | 808 | 1,368 | |||
| 10 | 1,224 | 809 | 1,006 | |||
| 17 | 1,008 | 810 | 1,248 | |||
| 22 | 948 | 811 | 326 | |||
| 24 | 1,608 | 812 | 1,138 | |||
| 29 | 1,392 | 813 | 648 | |||
| 30 | 1,710 | 814 | 720 | |||
| $11,406 | 815 | 446 | ||||
| 816 | 1,050 | |||||
| $8,826 | ||||||
The Cash in Bank account balance on April 30 was $16,644. In reviewing checks returned by the bank, the accountant discovered that check No. 811 written for $391 for delivery expense, was recorded in the cash disbursements journal as $326. The NSF check for $600 was that of customer R. Koppa, deposited in April.
Required
a. Prepare a bank reconciliation for Sandler Company at April 30.
b. Prepare the necessary journal entries to bring the Cash in Bank account into agreement with the reconciled cash balance on the bank reconciliation.
a.
| SANDLER COMPANY Bank Reconciliation April 30 | ||||||
|---|---|---|---|---|---|---|
| AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance | $Answer | AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance | $Answer | |||
| AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance | Answer | AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance | Answer | |||
| Answer | Answer | |||||
| Less: Outstanding checks (list in numerical order) | Less: NSF Check R. Koppa | Answer | ||||
| Check no. | Amount | |||||
| Answer | Answer | AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance | Answer | |||
| Answer | Answer | Error in recording | ||||
| Answer | Answer | Check No. 811 | Answer | |||
| Answer | Answer | Answer | Answer | |||
| AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance | $Answer | AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance | $Answer | |||
b.
| General Journal | ||||
|---|---|---|---|---|
| Date | Description | Debit | Credit | |
| April | 30 | AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income | $Answer | $Answer |
| AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income | Answer | Answer | ||
| To record interest earned on bank account for April. | ||||
| 30 | AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income | Answer | Answer | |
| AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income | Answer | Answer | ||
| To reclassify NSF check as an accounts receivable. | ||||
| 30 | AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income | Answer | Answer | |
| AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income | Answer | Answer | ||
| To record bank service charge. | ||||
| 30 | AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income | Answer | Answer | |
| AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income | Answer | Answer | ||
| To correct error in recording check 811. | ||||
