Oscar's Red Carpet Store maintains a checking account with Academy Bank. Oscar's sells carpet each day but makes bank deposits only once per week. The following provides information from the company's cash ledger for the month ending February 28, 2021. Date 2/4 2/11 2/18 2/25 2/26-2/28 Amount No. 321 322 323 Date Amount 2,300 Checks: 1,900 2,800 3,700 1,200 $ 4,300 600 2,100 1,800 400 Deposits: 2$ 2/2 2/8 2/12 2/19 324 Cash receipts: 325 2/27 $ 11,900 326 2/28 900 1,500 $11,600 327 2/28 $ 6,400 11,900 |(11,600) $ 6,700 Balance on February 1 Receipts Disbursements Balance on February 28 Information from February's bank statement and company records reveals the following additional information: a. The ending cash balance recorded in the bank statement is $10,390. b. Cash receipts of $1,200 from 2/26–2/28 are outstanding. c. Checks 325 and 327 are outstanding. d. The deposit on 2/11 includes a customer's check for $400 that did not clear the bank (NSF check). e. Check 323 was written for $2,800 for advertising in February. The bank properly recorded the check for this amount. f. An automatic withdrawal for Oscar's February rent was made on February 4 for $1,300. g. Oscar's checking account earns interest based on the average daily balance. The amount of interest earned for February is $160. h. In January, one of Oscar's suppliers, Titanic Fabrics, borrowed $5,200 from Oscar. On February 24, Titanic paid $5,350 ($5,200 borrowed amount plus $150 interest) directly to Academy Bank in payment for January's borrowing. i. Academy Bank charged service fees of $120 to Oscar's for the month. Required: 1. Prepare a bank reconciliation for Oscar's checking account on February 28, 2021. (Amounts to be deducted should be indicated with a minus sign. Total entries to the same account together when entering in the bank reconciliation.)
Oscar's Red Carpet Store maintains a checking account with Academy Bank. Oscar's sells carpet each day but makes bank deposits only once per week. The following provides information from the company's cash ledger for the month ending February 28, 2021. Date 2/4 2/11 2/18 2/25 2/26-2/28 Amount No. 321 322 323 Date Amount 2,300 Checks: 1,900 2,800 3,700 1,200 $ 4,300 600 2,100 1,800 400 Deposits: 2$ 2/2 2/8 2/12 2/19 324 Cash receipts: 325 2/27 $ 11,900 326 2/28 900 1,500 $11,600 327 2/28 $ 6,400 11,900 |(11,600) $ 6,700 Balance on February 1 Receipts Disbursements Balance on February 28 Information from February's bank statement and company records reveals the following additional information: a. The ending cash balance recorded in the bank statement is $10,390. b. Cash receipts of $1,200 from 2/26–2/28 are outstanding. c. Checks 325 and 327 are outstanding. d. The deposit on 2/11 includes a customer's check for $400 that did not clear the bank (NSF check). e. Check 323 was written for $2,800 for advertising in February. The bank properly recorded the check for this amount. f. An automatic withdrawal for Oscar's February rent was made on February 4 for $1,300. g. Oscar's checking account earns interest based on the average daily balance. The amount of interest earned for February is $160. h. In January, one of Oscar's suppliers, Titanic Fabrics, borrowed $5,200 from Oscar. On February 24, Titanic paid $5,350 ($5,200 borrowed amount plus $150 interest) directly to Academy Bank in payment for January's borrowing. i. Academy Bank charged service fees of $120 to Oscar's for the month. Required: 1. Prepare a bank reconciliation for Oscar's checking account on February 28, 2021. (Amounts to be deducted should be indicated with a minus sign. Total entries to the same account together when entering in the bank reconciliation.)
College Accounting (Book Only): A Career Approach
13th Edition
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:Scott, Cathy J.
Chapter6: Bank Accounts, Cash Funds, And Internal Controls
Section: Chapter Questions
Problem 5E
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Transcribed Image Text:Oscar's Red Carpet Store maintains a checking account with Academy Bank. Oscar's sells carpet each day but makes
bank deposits only once per week. The following provides information from the company's cash ledger for the month
ending February 28, 2021.
No.
321
322
Date
2/4
2/11
2/18
2/25
2/26-2/28
Amount
Date
2/2
2/8
2/12
2/19
2/27
Amount
$ 2,300 Checks:
1,900
2,800
3,700
1,200
$ 11,900
$ 4,300
600
2,100
1,800
400
Deposits:
323
324
Cash receipts:
325
326
2/28
900
1,500
$11,600
327
2/28
Balance on February 1
$ 6,400
Receipts
Disbursements
11,900
(11,600)
$ 6,700
Balance on February 28
Information from February's bank statement and company records reveals the following additional information:
a. The ending cash balance recorded in the bank statement is $10,390.
b. Cash receipts of $1,200 from 2/26-2/28 are outstanding.
c. Checks 325 and 327 are outstanding.
d. The deposit on 2/11 includes a customer's check for $400 that did not clear the bank (NSF check).
e. Check 323 was written for $2,800 for advertising in February. The bank properly recorded the check for this amount.
f. An automatic withdrawal for Oscar's February rent was made on February 4 for $1,300.
g. Oscar's checking account earns interest based on the average daily balance. The amount of interest earned for
February is $160.
h. In January, one of Oscar's suppliers, Titanic Fabrics, borrowed $5,200 from Oscar. On February 24, Titanic paid $5,350
($5,200 borrowed amount plus $150 interest) directly to Academy Bank in payment for January's borrowing.
i. Academy Bank charged service fees of $120 to Oscar's for the month.
Required:
1. Prepare a bank reconciliation for Oscar's checking account on February 28, 2021. (Amounts to be deducted should be indicated
with a minus sign. Total entries to the same account together when entering in the bank reconciliation.)
Transcribed Image Text:Required:
1. Prepare a bank reconciliation for Oscar's checking account on February 28, 2021. (Amounts to be deducted should be indicated
with a minus sign. Total entries to the same account together when entering in the bank reconciliation.)
OSCAR'S RED CARPET STORE
Bank Reconciliation
February 28, 2021
Bank's Cash Balance
Company's Cash Balance
Per bank statement
$ 10,390 Per general ledger
$
6,700
Deposits outstanding
1,200
NSF check
(400)
Checks outstanding
(1,900)
EFT for rent
(1,300)
Service fees
(120)
Company error
(700)
Interest on account
160
Note collected
5,200
Bank balance per reconciliation
$
9,690 Company balance per reconciliation
$
9,690
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