EBK AUDITING AND ASSURANCE SERVICES
16th Edition
ISBN: 9780134067117
Author: Hogan
Publisher: VST
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Textbook Question
Chapter 23, Problem 22DQP
You are doing the first-year audit of Sherman School District and have been assigned responsibility for doing a four-column proof of cash for the month of October 2019. You obtain the following information:
- 6. Interest on a bank loan for the month of October, charged by the bank but not recorded, was $596.
- 7. Proceeds on a note of the Jones Company were collected by the bank on October 28 but were not entered on the books:
- 8. On October 26, a $1,144 check of the Billings Company was charged to Sherman School District’s account by the bank in error.
- 9. Dishonored checks are not recorded on the books unless they permanently fail to clear the bank. The bank treats them as disbursements when they are dishonored and as deposits when they are redeposited. Checks totaling $1,335 were dishonored in October; $600 was redeposited in October and $735 in November.
Required
- a. Prepare a four-column proof of cash for the month ended October 31. It should show both adjusted and unadjusted cash.
- b. Prepare all
adjusting entries .
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The accounting records for Delta Driving School shows a cash balance of $14,134 on February 28, 2019. On the evening of February 28, company receipts of $1,250 were placed in the bank's night deposit drop box. The deposit was processed by the bank on March 1. The February 28 bank statement shows a balance of $18,877, including collection of a $6,000 note receivable plus $55 of interest earned, a service charge of $40, and a $1,550 debit memo for the payment of the company's utility bill. All of the checks that the company had written were listed on the bank statement except for check #1908 in the amount of $1,528.
Prepare a bank reconciliation to calculate the company’s adjusted cash balance at February 28, 2019.
Prepare the journal entries needed to adjust the cash records as a result of the bank reconciliation.
Circle the number that will appear as Cash on Delta’s Balance Sheet at February 28, 2019.
You are the bookkeeper of Holmes Renovations. You undertake a bank reconciliation at the end of every month. Holmes Renovations received its bank statement for the month ending 31 July 2021. The bank reconciliation at the end of last month showed a deposit in transit of $14,040 and two outstanding cheques (no. 363 for $3,672 and no. 371 for $7,560). The adjusted cash balance in the entity’s records was $127,566 debit at the end of June.
Below are the entity’s July bank statement and the entity’s book records that indicate the deposits made and cheques written during the month of July:
AU Bank - Bank Statement
For the period 01/03/2021 – 31/03/2021
Holmes Traders, NSW
Dr
Cr
Balance $
Balance brought forward
124,758
CR
1
July
Deposit
14,040
138,798
CR
3
July
Deposit
12,744
151,542
CR
July
Cheque # 382
5,616
145,926
CR
6
July
Deposit
7,344
153,270
CR
8…
Roper Electronics received its bank statement for the month of August with an ending balance of $11,775. Roper determined that Check No. 613 for $155 and Check No. 601 for $420 were both outstanding. A $6,900 deposit for August 30 was in transit as of the end of the month. Northern Regional Bank also collected $5,250 on a note receivable, which included interest of $250. The bank statement reveals a bank service charge of $20. A customer check for $68 was returned with the bank statement marked “NSF.” The ending balance of the Roper cash account is $12,938.
Question Content Area
a. Prepare a bank reconciliation as of August 31.
Cash balance according to bank statement
Add bank service chargeAdd collection feeAdd deposit in transitDeduct collection feeDeduct deposit in transit
Deduct outstanding checks:
No. 600No. 601No. 603No. 604No. 605
No. 611No. 612No. 613No. 614No. 615
Adjusted balance
Cash balance according to Roper Electronics
Add deposit in transitAdd note and…
Chapter 23 Solutions
EBK AUDITING AND ASSURANCE SERVICES
Ch. 23 - Explain the relationships among the initial...Ch. 23 - Prob. 2RQCh. 23 - Prob. 3RQCh. 23 - Prob. 4RQCh. 23 - Prob. 5RQCh. 23 - Prob. 6RQCh. 23 - Prob. 7RQCh. 23 - Prob. 8RQCh. 23 - Prob. 9RQCh. 23 - Prob. 10RQ
Ch. 23 - Prob. 11RQCh. 23 - Prob. 12RQCh. 23 - Prob. 13RQCh. 23 - Prob. 14.1MCQCh. 23 - Prob. 14.2MCQCh. 23 - Prob. 14.3MCQCh. 23 - Prob. 15.1MCQCh. 23 - Prob. 15.2MCQCh. 23 - Prob. 15.3MCQCh. 23 - Prob. 16.1MCQCh. 23 - Prob. 16.2MCQCh. 23 - Prob. 16.3MCQCh. 23 - Prob. 17DQPCh. 23 - Prob. 18DQPCh. 23 - Prob. 19DQPCh. 23 - Prob. 20DQPCh. 23 - Prob. 21DQPCh. 23 - You are doing the first-year audit of Sherman...Ch. 23 - Prob. 23DQPCh. 23 - McNeil Company, a medium-sized manufacturer of...Ch. 23 - The amount of subjectivity involved in...
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