Sunshine Interiors deposits all cash Coins, currency (paper money), checks, mone
ID: 2448570 • Letter: S
Question
Sunshine Interiors deposits all cash
Coins, currency (paper money), checks, money orders, and money on deposit that is available for unrestricted withdrawal from banks and other financial institutions. To simplify, this chapter assumes that a company has only one bank account, which is identified in the Ledger as "Cash."
receipts each Wednesday and Friday in a night depository, after banking hours. The data required to reconcile the bank statement
A summary of all transactions mailed to the depositor or made available online by the bank each month.
as of July 31 have been taken from various documents and records and are reproduced as follows. The sources of the data are printed in capital letters. All checks were written for payments on account.
BANK RECONCILIATION FOR PRECEDING MONTH (DATED JUNE 30):
Cash balance according to bank statement
$9,422.80
Add deposit of June 30, not recorded by bank
780.80
$10,203.60
Deduct outstanding checks:
No. 580
$310.10
No. 602
85.50
No. 612
92.50
No. 613
137.50
625.60
Adjusted balance
$ 9,578.00
Cash balance according to company’s records
$ 9,605.70
Deduct service charges
27.70
Adjusted balance
$ 9,578.00
CASH ACCOUNT:
Balance as of July 1: $9,578.00
CASH RECEIPTS FOR MONTH OF JULY: $6,465.42
DUPLICATE DEPOSIT TICKETS:
Date and amount of each deposit in July:
Date
Amount
Date
Amount
Date
Amount
July 2
$569.50
July 12
$580.70
July 23
$713.45
5
701.80
16
600.10
26
601.50
9
819.24
19
701.26
31
1,177.87
CHECKS WRITTEN: Number and amount of each check issued in July:
Check No.
Amount
Check No.
Amount
Check No.
Amount
614
$243.50
621
$309.50
628
$837.70
615
350.10
622
Void
629
329.90
616
279.90
623
Void
630
882.80
617
395.50
624
707.01
631
1,081.56
618
435.40
625
158.63
632
325.40
619
320.10
626
550.03
633
310.08
620
238.87
627
381.73
634
241.71
Total amount of checks issued in July: $8,379.42
JULY BANK STATEMENT:
Required:
1.
Prepare a bank reconciliation as of July 31. If errors in recording deposits or checks are discovered, assume that the errors were made by the company. Assume that all deposits are from cash sales. All checks are written to satisfy accounts payable. Refer to the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. (Note: “Deduct”, “Add”, “No.” or colons (:) will automatically appear if required.)
2.
Journalize the necessary entries. The accounts have not been closed. Refer to the Chart of Accounts for exact wording of account titles.
3.
What is the amount of Cash that should appear on the balance sheet as of July 31?
4.
Assume that a canceled check for $180 has been incorrectly recorded by the bank as $1,800. Select how the error would be included in a bank reconciliation and how it should be corrected.
BANK RECONCILIATION FOR PRECEDING MONTH (DATED JUNE 30):
Cash balance according to bank statement
$9,422.80
Add deposit of June 30, not recorded by bank
780.80
$10,203.60
Deduct outstanding checks:
No. 580
$310.10
No. 602
85.50
No. 612
92.50
No. 613
137.50
625.60
Adjusted balance
$ 9,578.00
Cash balance according to company’s records
$ 9,605.70
Deduct service charges
27.70
Adjusted balance
$ 9,578.00
CASH ACCOUNT:
Balance as of July 1: $9,578.00
CASH RECEIPTS FOR MONTH OF JULY: $6,465.42
Explanation / Answer
Bank reconciliation as of July 31 Cash balance according to company’s records, July 1 $ 9,578.00 Add: Cash receipts for the month of July $ 6,465.42 Less: Total amount of checks issued in July $ (8,379.42) Cash balance according to company’s records, July 31 $ 7,664.00 Bank Error in recording the check (1800-180) $ (1,620.00) Balance as per bank, July 31 $ 6,044.00
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