ACTG 1P91 Lecture Notes - Bank Statement, Accounts Receivable, Bank Reconciliation
ACTG 1P91 Full Course Notes
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The bank reconciliation prepared by Gatz Company on May 31,2017, appeared as follows:
| GATZ COMPANY | |||||
| Bank Reconciliation | |||||
| May 31, 2017 | |||||
| Bank statementbalance | $9,264.35 | Book balance | $19,429.00 | ||
| Add: | |||||
| Deposit of May 31 in transit | 949.00 | ||||
| $10,213.35 | |||||
| Deduct: | Deduct: | ||||
| Outstanding cheques: | NSF cheque plusservice | ||||
| #876 | $636.00 | charge | $11,530.65 | ||
| #882 | 1,744.00 | 2,380.00 | Bank servicecharge | 65.00 | 11,595.65 |
| Adjusted bankbalance | $7,833.35 | Adjusted bookbalance | $7,833.35 | ||
The Cash account in the General Ledger appeared as follows on June30 (Gatz uses only a General Journal to recordtransactions):
| Cash | Acct. No.101 | ||||
| Date | Explanation | PR | Debit | Credit | Balance |
| 2017 | |||||
| May 31 | Balance | 7,833.35 | |||
| June 1 | Cheque #883 | GJ16 | 1,847.00 | 5,986.35 | |
| 1 | Cheque #884 | GJ16 | 107.00 | 5,879.35 | |
| 3 | Cheque #885 | GJ16 | 618.00 | 5,261.35 | |
| 4 | Cheque #886 | GJ16 | 1,917.00 | 3,344.35 | |
| 9 | Deposit | GJ16 | 4,579.00 | 7,923.35 | |
| 12 | Cheque #887 | GJ16 | 425.15 | 7,498.20 | |
| 12 | Cheque #888 | GJ16 | 3,138.00 | 4,360.20 | |
| 12 | Cheque #889 | GJ16 | 936.00 | 3,424.20 | |
| 18 | Deposit | GJ16 | 3,879.00 | 7,303.20 | |
| 20 | Cheque #890 | GJ16 | 2,537.00 | 4,766.20 | |
| 21 | Cheque #891 | GJ16 | 1,406.24 | 3,359.96 | |
| 24 | Cheque #892 | GJ16 | 2,492.00 | 867.96 | |
| 26 | Cheque #893 | GJ16 | 71.00 | 796.96 | |
| 29 | Deposit | GJ16 | 1,745.00 | 2,541.96 | |
The following bank statement is available for June:
| Bank Statement | |||||
| To: GatzCompany | June 30, 2017 Bank of Montreal | ||||
| Cheques/Charges | Deposits/Credits | Balance | |||
| 05/31 | 9,264.35 | ||||
| #884 | 06/01 | 107.00 | 06/01 | 949.00 | 10,106.35 |
| #883 | 06/04 | 1,847.00 | 8,259.35 | ||
| #876 | 06/09 | 636.00 | 06/09 | 4,579.00 | 12,202.35 |
| #889 | 06/12 | 936.00 | 11,266.35 | ||
| #882 | 06/14 | 1,744.00 | 9,522.35 | ||
| #887 | 06/18 | 245.15 | 06/18 | 3,879.00 | 13,156.20 |
| #885 | 06/20 | 618.00 | 12,538.20 | ||
| #891 | 06/21 | 1,046.24 | 11,491.96 | ||
| #886 | 06/29 | 1,917.00 | 9,574.96 | ||
| SC | 06/30 | 72.00 | 06/30 | 9,502.96 | |
| NSF = Not Sufficient Funds | SC = Service Charge | PMT = Principal Payment | INT = Interest | ||
Required:
a. Prepare a bank reconciliation at June 30, 2017. Assumethat any errors made were by the book keeper (cheque #887 was foroffice supplies; cheque #891 was for utilities expense).(Round the final answers to the nearest cent.)
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b. Prepare the necessary entries resulting fromthe bank reconciliation.
Journal entry worksheet
Record to account for error in Cheque #887.
Note: Enter debits before credits.
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Journal entry worksheet
Record to account for error in Cheque #891.
Note: Enter debits before credits.
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Journal entry worksheet
Record bank service charges for June.
Note: Enter debits before credits.
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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 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.
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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.
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