Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 8, Problem 18E
a.
To determine
Prepare bank reconciliation of Z Corporation.
b.
To determine
Calculate the amount of cash to be reported on the
c.
To determine
Explain whether bank reconciliation needs to always balance.
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The following data were accumulated for use in reconciling the bank account of Zek’sCo. for May 2016:1. Cash balance according to the company’s records at May 31, 2016, $22,110.2. Cash balance according to the bank statement at May 31, 2016, $29,650.3. Checks outstanding, $13,875.4. Deposit in transit, not recorded by bank, $6,770.5. A check for $50 in payment of an account was erroneously recorded in the checkregister as $500.6. Bank debit memo for service charges, $15.a. Prepare a bank reconciliation, using the format shown in Exhibit 13.b. If the balance sheet were prepared for Zek’s Co. on May 31, 2016, what amount shouldbe reported for cash?c. Must a bank reconciliation always balance (reconcile)?
The cash account for Kahn Inc. on November 30, 2018, indicated a balance of $5,699. The bank statement indicated a balance of $13,167 on November 30, 2018. The following reconciling items were discovered.Checks outstanding totaled $5,175. A deposit of $3,842, representing cash receipts of November 30, had been made too late to appear on the bank statement. The bank had collected for Kahn $4,800 on a note left for collection. The face of the note was $4,200. Kahn had recorded a check for $2,040 as a $2,400. The check was for the payment of a 3-year insurance policy. A check for $1,176 had been incorrectly charged by the bank as $176. Bank service charges for November amounted to $25. Required: Prepare the bank reconciliation and journalize the necessary entries.
The following information is available for delta company as of April 30, 2014:
a. Cash on the books as of April 30 amounted to $114,175.28. Cash on the bank statement for the same date was $141,717.08
b. A deposit of $14,249.84, representing cash receipts of April 30, did not appear on the bank statement
c. Outstanding checks total $7,293.64.
d. A check for $2,420.00 returned with the statement recorded as $2024.00. The check was for advertising.
e. The bank service charge for April amounted to $26.00.
f. The bank collected $36,400.00 for delta company on a note. The face value of the note was $36,000.00.
g. An NSF check for $1,140.00 from a customer, hasan Ali, was returned with the statement.
h. The bank mistakenly deducted a check for $800.00 that was drawn by alpha corporation.
i. The bank reported a credit of $460.00 for interest on the average balance.
required
1. Why is a bank reconciliation a necessary internal control?
Chapter 8 Solutions
Financial Accounting
Ch. 8 - Prob. 1DQCh. 8 - Why should the employee who handles cash receipts...Ch. 8 - Prob. 3DQCh. 8 - Why should the responsibility for maintaining the...Ch. 8 - Assume that Brooke Miles, accounts payable clerk...Ch. 8 - Prob. 6DQCh. 8 - Prob. 7DQCh. 8 - Prob. 8DQCh. 8 - Prob. 9DQCh. 8 - Prob. 10DQ
Ch. 8 - Prob. 1PEACh. 8 - Prob. 1PEBCh. 8 - Prob. 2PEACh. 8 - Prob. 2PEBCh. 8 - Prob. 3PEACh. 8 - Prob. 3PEBCh. 8 - Prob. 4PEACh. 8 - Prob. 4PEBCh. 8 - Financial data for Otto Company follow: a....Ch. 8 - Prob. 5PEBCh. 8 - Prob. 1ECh. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Pacific Bank provides loans to businesses in the...Ch. 8 - Prob. 5ECh. 8 - An employee of JHT Holdings, Inc., a trucking...Ch. 8 - Prob. 7ECh. 8 - Prob. 8ECh. 8 - Prob. 9ECh. 8 - Prob. 10ECh. 8 - Prob. 11ECh. 8 - Prob. 12ECh. 8 - Prob. 13ECh. 8 - Abbe Co. is a small merchandising company with a...Ch. 8 - Prob. 15ECh. 8 - Prob. 16ECh. 8 - Prob. 17ECh. 8 - Prob. 18ECh. 8 - Prob. 19ECh. 8 - Prob. 20ECh. 8 - Prob. 21ECh. 8 - Prob. 22ECh. 8 - Prob. 23ECh. 8 - Prob. 24ECh. 8 - Mattel, Inc., designs, manufactures, and markets...Ch. 8 - El Dorado Inc. has monthly cash expenses of...Ch. 8 - Prob. 27ECh. 8 - Amicus Therapeutics, Inc., is a biopharmaceutical...Ch. 8 - Prob. 1PACh. 8 - Cactus Restoration Company completed the following...Ch. 8 - Prob. 3PACh. 8 - Prob. 4PACh. 8 - Prob. 5PACh. 8 - Prob. 1PBCh. 8 - Cedar Springs Company completed the following...Ch. 8 - Prob. 3PBCh. 8 - Prob. 4PBCh. 8 - Prob. 5PBCh. 8 - During the preparation of the bank reconciliation...Ch. 8 - Prob. 2CPCh. 8 - Prob. 3CPCh. 8 - Prob. 4CPCh. 8 - Prob. 5CPCh. 8 - TearLab Corp. is a health care company that...
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- The following information is available for delta company as of April 30, 2014: a. Cash on the books as of April 30 amounted to $114,175.28. Cash on the bank statement for the same date was $141,717.08 b. A deposit of $14,249.84, representing cash receipts of April 30, did not appear on the bank statement c. Outstanding checks total $7,293.64. d. A check for $2,420.00 returned with the statement recorded as $2024.00. The check was for advertising. e. The bank service charge for April amounted to $26.00. f. The bank collected $36,400.00 for delta company on a note. The face value of the note was $36,000.00. g. An NSF check for $1,140.00 from a customer, hasan Ali, was returned with the statement. h. The bank mistakenly deducted a check for $800.00 that was drawn by alpha corporation. i. The bank reported a credit of $460.00 for interest on the average balance. required 1. prepare a bank reconciliation for delta as of April 30, 2014. 2. Prepare the necessary journal critics from the…arrow_forwardEntries for Bank Reconciliation The following data were accumulated for use in reconciling the bank account of Creative Design Co. for August 2016: 1. Cash balance according to the company's records at August 31, $25,320. 2. Cash balance according to the bank statement at August 31, $26,660. 3. Checks outstanding, $5,140. 4. Deposit in transit not recorded by bank, $4,130. 5. A check for $590 in payment of an account was erroneously recorded in the check register as $950. 6. Bank debit memo for service charges, $30. Journalize the entries that should be made by the company that (a) increase cash and (b) decrease cash. a, 2016 Aug. 31 b. Aug. 31arrow_forward(Bank Reconciliation and Adjusting Entries) The cash account of Aguilar Co. showed a ledger balance of $3,969.85 on June 30, 2017. The bank statement as of that date showed a balance of $4,150. Upon comparing the statement with the cash records, the following facts were determined.1. There were bank service charges for June of $25.2. A bank memo stated that Bao Dai’s note for $1,200 and interest of $36 had been collected on June 29, and the bank had made a charge of $5.50 on the collection. (No entry had been made on Aguilar’s books when Bao Dai’s note was sent to the bank for collection.)3. Receipts for June 30 for $3,390 were not deposited until July 2.4. Checks outstanding on June 30 totaled $2,136.05.5. The bank had charged the Aguilar Co.’s account for a customer’s uncollectible check amounting to $253.20 on June 29.6. A customer’s check for $90 (as payment on the customer’s Accounts Receivable) had been entered as $60 in the cash receipts journal by Aguilar on June 15.7. Check…arrow_forward
- Entries for bank reconciliation The following data were accumulated for use in reconciling the bank account of Creative Design Co. for August 2016: 1. Cash balance according to the company's records at August 31, 518,130. 2. Cash balance according to the bank statement at August 31, $19,240. 3. Checks outstanding, $3,600. 4. Deposit in transit not recorded by bank, $2,960. 5. A check for $270 in payment of an account was erroneously recorded in the check register as $720. 6. Bank debit memo for service charges, $60. Journaline the entries that should be made by the company that (a) increase cash and (b) decrease cash. If an amount box does not require an entry, leave blank a: 2016 August 31 Cash b. August 31 Accounts Payable ✓arrow_forwardKingbird, Inc.'s bank statement from Main Street Bank at August 31, 2017, gives the following information. Balance, August 1 August deposits Checks cleared in August Bank credit memorandum: $18,770 Bank debit memorandum: 71,370 Safety deposit box fee $ 105 68,598 Service charge Balance, August 31 125 130 21,432 Interest earned A summary of the Cash account in the ledger for August shows the following: balance, August 1, $19,070; receipts $74,370; disbursements $73,49o; and balance, August 31, $19,950. Analysis reveals that the only reconciling items on the July 31 bank reconciliation were a deposit in transit for $4,880 and outstanding checks of $4,580. In addition, you determine that there was an error involving a company check drawn in August: A check for $400 to a creditor on account that cleared the bank in August was journalized and posted for $40. Determine deposits in transit. Deposits in transit SHOW LIST OF ACCOUNTS LINK TO TEXT VIDEO: APPLIED SKILLS Determine outstanding…arrow_forwardBank reconciliationAdjusted balance: $44,235The following data were accumulated for use in reconciling the bank account of Creative Design Co. for August 2016:1. Cash balance according to the company's records at August 31,$42,920. 2. Cash balance according to the bank statement at August 31, $56,300.3. Checks outstanding, $25,390.4. Deposit in transit not recorded by bank, $13,325. 5. A check for $150 in payment of an account was erroneously recordedin the check register as $1,500.6. Bank debit memo for service charges, $35. a. Prepare a bank reconciliation, using the format shown in Exhibit 13.b. If the balance sheet were prepared for Creative Design Co. on August 31, what amount should be reported for cash?C. Must a bank reconciliation always balance (reconcile)?arrow_forward
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