182) The following information is available for the Topper Company for the month of July.
a. On July 31, after all transactions have been recorded, the balance in the company’s Cash
account has a balance of $15,244.
b. The company’s bank statement shows a balance on July of $16,450.
c. Outstanding checks at July total $2,063.
d. A note receivable is collected by the bank for $570, but it is not yet recorded by Topper
Company.
e. A $107 NSF check from a customer, P. Flank is shown on the bank statements, but not yet
recorded by Topper.
f. A deposit placed in the bank’s night depository on July 31 totaling $1,275 did not appear on
the bank statement.
h. Bank fees of $45 for check printing are not yet recorded by Topper Company.
Prepare the July bank reconciliation for the Topper Company.
82
183) Umber Company’s bank reconciliation for September is presented below. Prepare the
necessary adjusting journal entries based on the reconciliation report.
UMBER COMPANY
Bank Reconciliation
September 30
Bank statement balance
Book balance of cash
$995
Add:
Add:
Deposit in transit
Proceeds of note
875
Bank error
1,870
Deduct:
Deduct:
Outstanding checks
NSF check plus processing fee
125
Bank service charge
15
Reconciled balance
Reconciled balance
$1,730
Cash
Accounts receivable
Service charge expense
83
184) The following information is available for the Victor Company for its March 31 bank
reconciliation:
From the March 31 bank statement:
Previous
Balance
Total Checks and
Debits
Total Deposits and
Credits
Current Balance
$9,908
$7,805
$11,905
$14,008
Checks and Debits
Deposits and Credits
Daily Balance
Date
No.
Amount
Date
Amount
Date
Amount
03/03
2874
1,210
03/02
4,340
03/01
9,908
03/11
2906
3,850
03/27
7,270
03/02
14,248
03/15
2905
170
03/31
295
IN
03/03
1,038
03/25
2909
725
03/11
9,188
03/29
2908
1,350
03/15
9,018
03/30
500
NSF
03/25
8,293
03/27
15,563
03/29
14,213
03/30
13,713
03/31
14,008
NSF: A check from a customer, Booker Co. in payment of their account.IN: Interest earned on
the account. From the Victor Company’s accounting records:
Cash Receipts Deposited
Date
Cash Debit
March
7
4,340
27
7,270
31
2,090
13,700
Cash Payments
Check No.
Cash Credit
2905
170
2906
3,850
2907
460
2908
1,350
2909
725
2910
340
6,895
84
CashAcct. No. 101
Date
Explanation
PR
Debit
Credit
Balance
February
28
Balance
8,698
March
31
Total receipts
R4
13,700
22,398
31
Total payments
D5
6,895
15,503
1. Based on the above information, prepare a bank reconciliation for the Victor Company.2.
Prepare the necessary general journal entries to adjust cash to the reconciled balance.
March 31
Mar. 31
Cash
Interest revenue
Mar. 31
Accounts receivable–Booker Company
Cash
185) Zhang Co. uses a voucher system for documentation and verification. Complete the
following grid regarding their system.
What is the
relevant
document used?
Who prepares
the document?
Who receives the
document?
Need to order
merchandise
Order is placed
Goods are billed
Goods are
received
relevant
document used?
Who prepares
the document?
Who receives the
document?
Need to order
merchandise
Purchase
requisition
Department
manager
department and
accounting
Order is placed
Purchase order
Purchasing
department
department,
receiving
department
Goods are billed
Invoice
Vendor
buyer
Goods are
received
Receiving report
Receiving
department
purchasing
department
86
186) Determine whether each of the following is an internal control strength or weakness
1. Receiving department manager places an order with the vendor for merchandise inventory.
2. A voucher is used to certify a transaction and authorize recording of the liability.
3. Goods are received by the receiving department and documented with a receiving report.
4. Accounting department pays the vendor’s invoice before goods are received.
5. Invoices are paid after completion of the invoice approval documenting the purchase
requisition, purchase order, receiving report, invoice, and approval for payment.
87
187) The following items a through f would cause Samson Company’s book balance of cash to
differ from its bank statement balance of cash.
a. A check printing charge imposed by the bank.
b. A check listed as outstanding on the previous period’s reconciliation and still outstanding at
the end of this month.
c. A deposit made on the last day of the month was not included on the bank statement.
d. A customer’s check was returned for insufficient funds (NSF).
e. A check written in the current period has not yet been paid or returned by the bank.
f. A note receivable was collected by the bank and added to Samson’s account.
Indicate where each item, letters a-f, would appear on Samson Company’s bank reconciliation by
placing its identifying letter in the parentheses in the proper section of the form below.
Bank statement cash balance
Book balance of cash
Add:
( )
Add:
( )
( )
( )
( )
( )
Deduct:
( )
Deduct:
( )
( )
( )
( )
( )
Reconciled balance
Reconciled balance
Bank statement cash balance
Book balance of cash
Add:
(c)
Add:
(f )
( )
( )
( )
( )
( )
( )
Deduct:
(b)
Deduct:
(a)
(e)
(d)
( )
( )
Reconciled balance
( )
Reconciled balance
88
188) The following information is available for Bosch Company for the month of May.
a. On May 31, after all transactions have been recorded, the balance in the company’s Cash
account has a balance of $6,322.
b. The company’s bank statement shows a balance on July of $6,450.
c. Outstanding checks total $63.
d. A $47 NSF check from a customer, T. Shannon is shown on the bank statement but not yet
recorded by Bosch Company.
e. A deposit placed in the bank’s night depository on May 31 totaling $275 did not appear on the
bank statement.
f. Bank fees for check printing of $45 are not yet recorded by Bosch Company.
g. A note receivable for $432 is collected by the bank for Bosch Company, but it not yet
recorded by Bosch Company.
Prepare the May bank reconciliation for the Bosch Company.
89
189) Bosch Company’s bank reconciliation for May is presented below. Prepare the necessary
adjusting journal entries based on the reconciliation report.
Bosch Company
Bank Reconciliation
May 31
Bank statement balance
$6,450
Book balance
$6,322
Add:
Add:
Deposit in transit
275
Collection of a note
400
Note interest
32
432
6,725
6,754
Deduct:
Deduct:
Outstanding checks
63
NSF check
$47
Check printing charges
45
92
Adjusted bank balance
$6,662
Adjusted book balance
$6,662
31
Cash
432
400
31
Accounts Receivable
47
Miscellaneous Expenses
45
90
190) The following information is available to reconcile Dibble Co.’s book balance of cash with
its bank statement cash balance as of April 30. The April 30 cash balance according to the
accounting records is $68,356, and the bank statement cash balance for that date is $73,525.
a. The bank erroneously cleared a $480 check against the account in April that was not issued by
Dibble. The check documentation included with the bank statement indicates the check was
actually issued by Flushing Co.
b. $53 interest earned on Dibble’s cash balance in the bank is not yet recorded by Dibble.
c. When the April checks are compared with entries in the accounting records, it is found that
Check No. 1828 had been correctly drawn for $1,530 to pay for advertising but was erroneously
entered in the accounting records as $1,350.
d. The bank collected $9,970 cash on a note receivable for Dibble. Dibble did not record this
transaction before receiving the statement.
e. The bank statement includes an NSF check for $895 received from a customer. Dibble did not
record this NSF check before receiving the statement.
f. Dibble’s April 30 daily cash receipts of $5,102 were placed in the bank’s night depository on
that date, but do not appear on the April 30 bank statement.
g. Dibble’s April 30 cash payments journal indicates that Check No. 1837 for $584 and Check
No. 1840 for $1,219 were both written and entered in the accounting records, but are not among
the canceled checks.
1. Prepare the bank reconciliation for this company as of April 30.
2. Prepare the journal entries necessary to bring the company’s book balance of cash into
conformity with the reconciled cash balance as of April 30.
91