chapter 7 lab -04 Bank Reconciliation and Entries The cash account for Collegiat
ID: 2543223 • Letter: C
Question
chapter 7 lab -04
Bank Reconciliation and Entries
The cash account for Collegiate Sports Co. on November 1, 20Y9, 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, 20Y9. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:
Checks outstanding totaled $41,840.
A deposit of $12,200, representing receipts of November 30, had been made too late to appear on the bank statement.
A check for $7,250 had been incorrectly charged by the bank as $2,750.
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.
The bank had collected for Collegiate Sports Co. $7,385 on a note left for collection. The face of the note was $7,000.
Bank service charges for November amounted to $125.
A check for $2,500 from Hallen Academy was returned by the bank because of insufficient funds.
Required:
1. Prepare a bank reconciliation as of November 30, 20Y9.
2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. For a compound entry, if an amount box does not require an entry, leave it blank.
3. If a balance sheet were prepared for Collegiate Sports Co. on November 30, 20Y9, what amount should be reported as cash?
$____________________
Cash balance according to bank statement $ Adjustments: Deposit of November 30, not recorded by bank $ Bank error in charging check as $2,750 instead of $7,250 Outstanding checks Total adjustments Adjusted balance $ Cash balance according to company's records $ Adjustments: Proceeds of note collected by bank, including $385 interest $ Error in recording check as $7,600 instead of $760 Check returned because of insufficient funds Bank service charges Total adjustments 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 entry, if an amount box does not require an entry, leave it blank.
20Y9 Nov. 30 Cash Notes Receivable Interest Revenue Accounts Payable-Ramirez Co. Nov. 30 Accounts Receivable-Hallen Academy Miscellaneous Expense CashExplanation / Answer
Cash should be reported in the balance sheet as $78535
Bank reconciliation Bank balance 112675 Add Deposit in transit 12200 Less Outstanding checks 41840 Incorrectly charged by bank (7250-2750) 4500 46340 Adjusted bank balance 78535 Cash balance 66935 Add Directly deposited in bank(notes + interest) 7385 Error in recording (7600-760) 6840 14225 Less Service fees 125 NSF check 2500 2625 Adjusted cash balance 78535 Journal entries 1 Cash 14225 Notes receivable 7000 Interest revenue 385 Accounts payable ramirez co. 6840 2 Accounts receivable hallen academy 2500 Misc. Expense 125 Cash 2625Related Questions
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