The cash account for Collegiate Sports Co. on November 1, 2016, indicated a bala
ID: 2509683 • Letter: T
Question
The cash account for Collegiate Sports Co. on November 1, 2016, indicated a balance of $81,145. During November, the total cash deposited was $293,150, and checks written totaled $307,360. The bank statement indicated a balance of $112,675 on November 30, 2016. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:
Chart of Accounts
Amount Descriptions
Bank Reconciliation
1. Prepare a bank reconciliation as of November 30. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. “Deduct:” or “Add:” will automatically appear if it is required. Whenever there is more than one adjusting item in the bank portion of the reconciliation or the general ledger portion of the bank reconciliation, enter in the order presented in the instructions.
COLLEGIATE SPORTS CO.
Bank Reconciliation
November 30, 2016
1
Cash balance according to bank statement
2
3
4
5
6
Adjusted balance
7
8
Cash balance according to company’s records
9
10
11
12
13
14
Adjusted balance
Journal
2. Journalize the necessary entries. The accounts have not been closed. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 1
JOURNAL
1
2
3
4
5
6
7
Final Question
3. If a balance sheet were prepared for Collegiate Sports Co. on November 30, 2016, what amount should be reported as cash?
A. Checks outstanding totaled $41,840. B. A deposit of $12,200, representing receipts of November 30, had been made too late to appear on the bank statement. C. A check for $7,250 had been incorrectly charged by the bank as $2,750. D. A check for $760 returned with the statement had been recorded by Collegiate Sports Co. as $7,600. The check was for the payment of an obligation to Ramirez Co. on account. E. The bank had collected for Collegiate Sports Co. $7,385 on a note left for collection. The face of the note was $7,000. F. Bank service charges for November amounted to $125. G. A check for $2,500 from Hallen Academy was returned by the bank because of insufficient funds.Explanation / Answer
Answer:
1
COLLEGIATE SPORTS CO.
Bank Reconciliation
30-Nov-16
Cash balance according to bank statement
112675
Add: deposited of Nov 30 not recorded in bank
12200
Less: Outstanding cheque
-41840
bank error (7250-2750)
-4500
-34140
78535
Adjusted balance
Cash balance according to company’s records (81145+293150-307360)
66935
Add: Collection of note with interest
7385
Error in recording cheque
(7600-760)
6840
Less:
Bank service fee
-125
NSG cheque
-2500
11600
Adjusted balance
78535
_______________________________
2
DATE
DESCRIPTION
DEBIT
CREDIT
30-Nov
Cash
14225
Note receivable
7000
Interest revenue
385
Account payable Remirez company
6840
30-Nov
Account receivable
2500
Miscellanies Expanses
125
Cash
2625
______________________________
3
If a balance sheet were prepared for Collegiate Sports Co. on November 30, 2016, what amount should be reported as cash?
Answer:
Cash balance is equal to adjusted balances per the bank reconciliation statement
So, Cash balance =$78,535
COLLEGIATE SPORTS CO.
Bank Reconciliation
30-Nov-16
Cash balance according to bank statement
112675
Add: deposited of Nov 30 not recorded in bank
12200
Less: Outstanding cheque
-41840
bank error (7250-2750)
-4500
-34140
78535
Adjusted balance
Cash balance according to company’s records (81145+293150-307360)
66935
Add: Collection of note with interest
7385
Error in recording cheque
(7600-760)
6840
Less:
Bank service fee
-125
NSG cheque
-2500
11600
Adjusted balance
78535
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