75) Refer to the following bank reconciliation:
Bank Book
Balance, June 30, 2019 $11,240 Balance, June 30, 2019 $10,200
Add: Add:
Deposit in transit 3,110 Note collected by bank 2,100
Interest revenue 55
Less: Less:
Outstanding checks #506 1,200 NSF check 85
Outstanding checks #510 900 Bank service charge 20
________ ________
Adjusted balance, Adjusted balance,
June 30, 2019 $12,250 June 30, 2019 $12,250
Journalize the adjusting entry for the first reconciling item: Note collected by bank. Omit explanation.
76) Refer to the following bank reconciliation:
Bank Book
Balance, June 30, 2019 $11,240 Balance, June 30, 2019 $10,200
Add: Add:
Deposit in transit 3,110 Note collected by bank 2,100
Interest revenue 55
Less: Less:
Outstanding checks #506 1,200 NSF check 85
Outstanding checks #510 900 Bank service charge 20
________ ________
Adjusted balance, Adjusted balance,
June 30, 2019 $12,250 June 30, 2019 $12,250
Journalize the adjusting entry for the second reconciling item: Interest revenue. Omit explanation
77) Refer to the following bank reconciliation:
Bank Book
Balance, June 30, 2018 $11,240 Balance, June 30, 2018 $10,200
Add: Add:
Deposit in transit 3,110 Note collected by bank 2,100
Interest revenue 55
Less: Less:
Outstanding checks #506 1,200 NSF check 85
Outstanding checks #510 900 Bank service charge 20
________ ________
Adjusted balance, Adjusted balance,
June 30, 2018 $12,250 June 30, 2018 $12,250
Journalize the adjusting entry for the third reconciling item: NSF check. Omit explanation
78) Refer to the following bank reconciliation.
Bank Book
Balance, June 30, 2019 $11,240 Balance, June 30, 2019 $10,200
Add: Add:
Deposit in transit 3,110 Note collected by bank 2,100
Interest revenue 55
Less: Less:
Outstanding checks #506 1,200 NSF check 85
Outstanding checks #510 900 Bank service charge 20
________ ________
Adjusted balance, Adjusted balance,
June 30, 2019 $12,250 June 30, 2019 $12,250
Journalize the adjusting entry for the fourth reconciling item: Bank service charge. Omit explanation
79) Why is it necessary to journalize transactions from the bank reconciliation? List two examples of items
that need to be journalized.
1) Cash equivalents are included in the calculation of the cash ratio.
2) A cash equivalent is a highly liquid investment that can be converted into cash in one year or less.
3) Having a cash ratio above 1.0 implies that a company has enough cash and cash equivalents to pay
current liabilities.
4) Checking accounts and money market accounts are examples of cash equivalents.
5) The cash ratio helps to determine a company’s ability to meet its short-term obligations.
6) A cash ratio below 1.0 implies that the company has an insufficient amount of cash and cash
equivalents to pay current liabilities.
7) A very low cash ratio does not send a strong message to investors and creditors that the company has
the ability to repay its short-term debt.
8) Cash and cash equivalents are divided by ________ to determine the cash ratio.
A) total current liabilities
B) fixed assets
C) equity
D) total long-term liabilities
9) The ________ is a measure of a company’s ability to pay its current liabilities from cash and cash
equivalents.
A) cash conversion cycle
B) cash ratio
C) gross profit
D) debt equity ratio