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Chapter 07 - Internal Control and Cash
Balance per bank
$16,750
Balance per company records
16,125
Bank service charges
80
Deposit in transit
2,195
NSF check
950
Outstanding checks
3,850
What is the adjusted balance on the bank reconciliation?
ANSWER:
$15,095 ($16,750 + $2,195 – $3,850) or ($16,125 – $80 – $950)
POINTS:
1
DIFFICULTY:
Moderate
Bloom's: Applying
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-05 - LO: 07-05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.11 - Bank Reconciliation
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
167. The following data were gathered to use in reconciling the bank statement of Build-A-Lot:
Balance per bank
$14,355
Balance per company records
14,010
Bank service charges
80
Deposits in transit
4,100
NSF checks
775
Outstanding checks
5,300
(1) What is the adjusted balance on the bank reconciliation?
(2) Journalize any necessary entries for Build-A-Lot based on the bank reconciliation.
ANSWER:
(1) $13,155
Bank section reconciliation: $14,355 + $4,100 – $5,300 = $13,155
Company section of reconciliation: $14,010 – $80 – $775 = $13,155
(2)
Accounts Receivable
775
Miscellaneous Expense
80
Cash
855
POINTS:
1
DIFFICULTY:
Moderate
Bloom's: Applying
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-05 - LO: 07-05
Chapter 07 - Internal Control and Cash
ANSWER:
(a)
Santiago Co.
Bank Reconciliation
May 31
Cash balance according to bank statement
$25,645
Adjustments:
Deposits not recorded by bank
$3,796
Outstanding checks
(5,975)
Total adjustments
(2,179)
Adjusted balance
$23,466
Cash balance according to company’s records
$20,915
Adjustments:
Proceeds of note and interest collected by bank
$4,515
Error in recording check
(1,000)
Bank service charges
(70)
Nonsufficient funds check
(894)
Total adjustments
2,551
Adjusted balance
$23,466
Chapter 07 - Internal Control and Cash
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Page 76
(a)
Cash sales of $945 had been erroneously recorded in the cash receipts journal as $495.
(b)
Deposits in transit not recorded by bank, $778.
(c)
Bank debit memo for service charges, $40.
(d)
Bank credit memo for note collected by bank, $23,985 plus $885 interest.
(e)
Bank debit memo for $756 NSF (not sufficient funds) check from Calin Sams, a customer.
(f)
Checks outstanding, $1,860.
Record the appropriate journal entries that would be necessary for Jeffrey Co.
ANSWER:
Cash
25,320
Notes Receivable
23,985
Interest Revenue
885
Sales
450
Accounts Receivable—Calin Sams
756
Miscellaneous Expense
40
Cash
796
POINTS:
1
DIFFICULTY:
Moderate
Bloom's: Applying
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-05 - LO: 07-05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.11 - Bank Reconciliation
ACCT.AICPA.FN.03 - Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
172. The bank statement for Gatlin Co. indicates a balance of $7,735 on June 30. After the journal entries for June had
been posted, the cash account had a balance of $4,098.
(a)
Cash sales of $742 had been erroneously recorded in the cash receipts journal as $724.
(b)
Deposits in transit not recorded by bank, $425.
(c)
Bank debit memo for service charges, $35.
(d)
Bank credit memo for note collected by bank, $2,475 including $75 interest.
(e)
Bank debit memo for $256 NSF (not sufficient funds) check from Janice Smith, a customer.
(f)
Checks outstanding, $1,860.
Record the appropriate journal entries that would be necessary for Gatlin Co.
ANSWER:
Cash
2,493
Notes Receivable
2,400
Interest Revenue
75
Sales
18
Accounts Receivable—Janice Smith
256
Miscellaneous Expense
35
POINTS:
1
DIFFICULTY:
Moderate
