ACC 100 Chapter 7: ACC 100 Chapter 7 Notes.docx

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goldswan943

13 Mar 2012

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Cash equivalent: an investment that is readily convertible to a known amount of cash and has an original maturity to the investor of three months or less. Cash management: necessary to ensure that any point in time, a company has neither too little nor too much cash on hand. The bank reconciliation: bank statement: a detailed list, provided by the bank, of all the activity for a particular account during the month. Outstanding cheque: a cheque written by a company but not yet presented to the bank for payment. Deposit in transit: a deposit recorded on the books but not yet reflected on the bank statement. Service charge: banks charge for various services they provide. Subsidiary ledger: the detail for a number of individual item that collectively make up a single general ledger account. Control account: the general ledger account that is supported by a subsidiary ledger.

Related Questions

The balance in Happ, Inc.âs general ledger Cash account was$14,300 at September 30, before reconciliation. The September 30balance shown in the bank statement was $12,830. Reconciling itemsincluded deposits in transit, $1,370; bank service charges, $155;NSF check written by a customer and returned with the bankstatement, $620; outstanding checks, $550; and interest credited tothe account during September but not recorded on the companyâsbooks, $125.

Required:

Prepare a bank reconciliation as of September 30 for Happ,Inc.

HAPP, INC.
Bank Reconciliation
September 30
Balanceper bank		Balanceper books
Add:		Add:


	0
	0		0
Deduct:		Deduct:


	0		0
Reconciled balance	$0	Reconciled balance	$0

azureleopard733

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.

redhyena608

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.)

GATZ COMPANY
Bank Reconciliation
June 30, 2017
Bank Statement		Company's Books
Bankstatement balance		Bookbalance
Add:		Add:



	$0.00		$0.00
Deduct:		Deduct:
Outstanding cheques:





	0.00
Adjusted bank balance		Adjusted book balance

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.

Date	General Journal	Debit	Credit
Jun 30

Journal entry worksheet

Record to account for error in Cheque #891.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Jun 30

Journal entry worksheet

Record bank service charges for June.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Jun 30

greyhamster472

ACC 100 Chapter 7: ACC 100 Chapter 7 Notes.docx

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