ACTG 2200 Study Guide - Midterm Guide: Bank Reconciliation, Asset, Electronic Funds Transfer

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blusheel860

21 Feb 2017

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Quiz: which of the following control activities is designed to prevent errors of fraud from occurring, performance reviews, physical controls, audits, reconciliations. Which of the following adjusts the company"s cash balance in a bank reconciliation: checks outstanding, an error by the company, an error by the bank, deposits outstanding. Accounts receivable are normally reported on the balance sheet as the: gross amount only, gross amount plus accrued interest, expected amount to be received (net realizable value, gross amount less expected collection costs an uncollectible account. Under the allowance method of recognizing uncollectible accounts,the entry to write off: increases the allowance for uncollectible accounts, has no effect on the allowance for uncollectible accounts, has no effect on the net income, decreases net income. Cost of goods sold equals: beginning inventory - purchases + ending inventory, beginning inventory + accounts payable - purchases, purchases + ending inventory - beginning inventory, beginning inventory + purchases - ending inventory.

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El Gato Painting Company maintains a checking account at American Bank. Bank statements are prepared at the end of each month. The November 30, 2018, reconciliation of the bank balance is as follows:

Balance per bank, November 30		$3,281
Add: Deposits outstanding		$1,250
Less: Checks outstanding
#363	$128
#365	$206
#380	$61
#381	$91
#382	$390	($876)
Adjusted balance per bank, November 30		3,655

The company’s general ledger checking account showed the following for December:

Balance, December 1	$3,655
Receipts	$43,150
Disbursements	($42,353)
Balance, December 31	$4,452

The December bank statement contained the following information:

Balance, December 1	$3,281
Deposits	$43,500
Checks processed	($42,418)
Service charges	($27)
NSF checks	($490)

Balance, December 31	3,846

The checks that were processed by the bank in December include all of the outstanding checks at the end of November except for check #365. In addition, there are some December checks that had not been processed by the bank by the end of the month. Also, you discover that check #411 for $430 was correctly recorded by the bank but was incorrectly recorded on the books as a $340 disbursement for advertising expenses. Included in the bank’s deposits is a $1,800 deposit incorrectly credited to the company’s account. The deposit should have been posted to the credit of the Los Gatos Company. The NSF checks have not been redeposited and the company will seek payment from the customers involved.

Required
1. Prepare a bank reconciliation for the El Gato checking account on December 31, 2018.
2. Prepare any necessary adjusting journal entries indicated.

pinkcoyote651

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

On July 31, the company’s Cash account has a $25,457 debit balance, but its July bank statement shows a $28,096 cash balance.
Check No. 3031 for $1,620, Check No. 3065 for $586, and Check No. 3069 for $2,388 are outstanding checks as of July 31.
Check No. 3056 for July rent expense was correctly written and drawn for $1,260 but was erroneously entered in the accounting records as $1,250.
The July bank statement shows the bank collected $5,000 cash on a note for Branch. The branch had not recorded this event before receiving the statement.
The bank statement shows an $805 NSF check. The check had been received from a customer, Evan Shaw. The branch has not yet recorded this check as NSF.
The July statement shows a $8 bank service charge. It has not yet been recorded in miscellaneous expenses because no previous notification had been received.
Branch’s July 31 daily cash receipts of $6,132 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 make the company’s book balance of cash equal to the reconciled cash balance as of July 31. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

amaranthsheep227

Bank Reconciliation and Entries

The cash account for Brentwood Bike Co. at May 1 indicated a balance of $14,780. During May, the total cash deposited was $74,910 and checks written totaled $69,550. The bank statement indicated a balance of $25,390 on May 31. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:

Checks outstanding totaled $11,310.

A deposit of $9,210, representing receipts of May 31, had been made too late to appear on the bank statement.

The bank had collected for Brentwood Bike Co. $4,870 on a note left for collection. The face of the note was $4,490.

A check for $360 returned with the statement had been incorrectly charged by the bank as $630.

A check for $850 returned with the statement had been recorded by Brentwood Bike Co. as $580. The check was for the payment of an obligation to Adkins Co. on account.

Bank service charges for May amounted to $60.

A check for $1,120 from Jennings Co. was returned by the bank because of insufficient funds.

Instructions:

1. Prepare a bank reconciliation as of May 31.

Brentwood Bike Co.
Bank Reconciliation
May 31
Cash balance according to bank statement		$
Add deposit of May 31, not recorded by bank	$
Add bank error in charging check as $630 instead of $360
		$
Deduct outstanding checks
Adjusted balance		$
Cash balance according to company's records		$
Add note and interest collected by bank
		$
Deduct check returned because of insufficient funds	$
Deduct bank service charges
Deduct error in recording check
Adjusted balance		$

2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. For a compound transaction, if an amount box does not require an entry, leave it blank.

a. May 31	Cash
	Notes Receivable
	Interest Revenue
b. May 31	Accounts Payable-Adkins Co.
	Accounts Receivable-Jennings Co.
	Miscellaneous Expense
	Cash

3. If a balance sheet were prepared for Brentwood Bike Co. on May 31, what amount should be reported as cash?
$

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ACTG 2200 Study Guide - Midterm Guide: Bank Reconciliation, Asset, Electronic Funds Transfer

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