Bank reconciliation and entries Sunshine Interiors deposits all cash receipts each Wednesday and Friday in a night depository, after banking hours. The data required to reconcile the bank statement as of July 31, 20Y0, have been taken from various documents and records and are reproduced as follows. The sources of the data are printed in capital letters. All checks were written for payments on account. CASH ACCOUNT: Balance as of July 1 $9,578.00 CASH RECEIPTS FOR MONTH OF JULY 6,465.42 DUPLICATE DEPOSIT TICKETS: Date and amount of each deposit in July: CHECKS WRITTEN: Number and amount of each check issued in July: BANK RECONCILIATION FOR PRECEDING MONTH: Sunshine Interiors Bank Reconciliation June 30,20Y0 Cash balance according to bank statement $9,422.80 Adjustments: Deposit of June 30 not recorded by bank $780.80 Outstanding Check No. 580 (310.10) Outstanding Check No. 602 (85.50) Outstanding Check No. 612 (92.50) Outstanding Check No. 613 (137.50) Total adjustments 155.20 Adjusted balance $9,578.00 Cash balance according to company’s records $9,605.70 Adjustments: Bank service charges (27.70) Adjusted balance $9,578.00 Instructions 1. Prepare a bank reconciliation as of July 31, 20Y0. If errors in recording deposits or checks are discovered, assume that the errors were made by the company. Assume that all deposits are from cash sales. All checks are written to satisfy accounts payable. 2. Journalize the necessary entries. 3. What is the amount of cash that should appear on the balance sheet as of July 31, 20Y0? 4. Assume that a canceled check for $180 has been incorrectly recorded by the bank as $1,800. Briefly explain how the error would be included in a bank reconciliation and how it should be corrected.

BuyFind

Financial & Managerial Accounting

14th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337119207
BuyFind

Financial & Managerial Accounting

14th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337119207

Solutions

Chapter
Section
Chapter 7, Problem 7.5BPR
Textbook Problem

Bank reconciliation and entries

Sunshine Interiors deposits all cash receipts each Wednesday and Friday in a night depository, after banking hours. The data required to reconcile the bank statement as of July 31, 20Y0, have been taken from various documents and records and are reproduced as follows. The sources of the data are printed in capital letters. All checks were written for payments on account.

CASH ACCOUNT:  
Balance as of July 1 $9,578.00
CASH RECEIPTS FOR MONTH OF JULY 6,465.42
DUPLICATE DEPOSIT TICKETS:  

Date and amount of each deposit in July:

Chapter 7, Problem 7.5BPR, Bank reconciliation and entries Sunshine Interiors deposits all cash receipts each Wednesday and , example  1

CHECKS WRITTEN:

Number and amount of each check issued in July:

Chapter 7, Problem 7.5BPR, Bank reconciliation and entries Sunshine Interiors deposits all cash receipts each Wednesday and , example  2

BANK RECONCILIATION FOR PRECEDING MONTH:

Sunshine Interiors

Bank Reconciliation

June 30,20Y0

Cash balance according to bank statement   $9,422.80
Adjustments:    
Deposit of June 30 not recorded by bank $780.80  
Outstanding Check No. 580 (310.10)  
Outstanding Check No. 602 (85.50)  
Outstanding Check No. 612 (92.50)  
Outstanding Check No. 613 (137.50)  
Total adjustments   155.20
Adjusted balance   $9,578.00
Cash balance according to company’s records   $9,605.70
Adjustments:    
Bank service charges   (27.70)
Adjusted balance   $9,578.00

Instructions

  1. 1. Prepare a bank reconciliation as of July 31, 20Y0. If errors in recording deposits or checks are discovered, assume that the errors were made by the company. Assume that all deposits are from cash sales. All checks are written to satisfy accounts payable.
  2. 2. Journalize the necessary entries.
  3. 3. What is the amount of cash that should appear on the balance sheet as of July 31, 20Y0?
  4. 4. Assume that a canceled check for $180 has been incorrectly recorded by the bank as $1,800. Briefly explain how the error would be included in a bank reconciliation and how it should be corrected.

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Chapter 7 Solutions

Financial & Managerial Accounting
Ch. 7 - Internal control elements Identify each of the...Ch. 7 - Items on companys bank statement The following...Ch. 7 - Bank reconciliation The following data were...Ch. 7 - Petty cash fund Prepare journal entries for each...Ch. 7 - Sarbanes-Oxley internal control report Using...Ch. 7 - Internal Controls Faith Cassen has recently been...Ch. 7 - Internal Controls Ramonas Clothing is a retail...Ch. 7 - Internal Controls for bank lending Pacific Bank...Ch. 7 - Internal Controls One of the largest losses in...Ch. 7 - Internal controls An employee of JHT Holdings,...Ch. 7 - Internal controls All-Around Sound Co. discovered...Ch. 7 - Financial statement fraud A former chairman, CFO,...Ch. 7 - Internal control of cash receipts The procedures...Ch. 7 - Internal control of cash receipts Sergio Flores...Ch. 7 - Internal control of cash receipts The mailroom...Ch. 7 - Entry for cash sales; cash short The actual cash...Ch. 7 - Entry for cash sales; cash over The actual cash...Ch. 7 - Internal control of cash payments Abbe Co. is a...Ch. 7 - Internal control of cash payments Paragon Tech...Ch. 7 - Bank reconciliation Identify each of the following...Ch. 7 - Entries based on bank reconciliation Which of the...Ch. 7 - Bank reconciliation The following data were...Ch. 7 - Entries for bank reconciliation Using the data...Ch. 7 - Entries for note collected by bank Accompanying a...Ch. 7 - Bank reconciliation An accounting clerk for...Ch. 7 - Bank reconciliation The following bank...Ch. 7 - Using bank reconciliation to determine cash...Ch. 7 - Petty cash fund entries Journalize the entries to...Ch. 7 - Evaluating internal control of cash T he following...Ch. 7 - Transactions for petty cash, cash short and over...Ch. 7 - Bank reconciliation and entries The cash account...Ch. 7 - Bank reconciliation and entries The cash account...Ch. 7 - Bank reconciliation and entries Beeler Furniture...Ch. 7 - Evaluating internal control of cash The following...Ch. 7 - Transactions for petty cash, cash short and over...Ch. 7 - Bank reconciliation and entries The cash account...Ch. 7 - Bank reconciliation and entries The cash account...Ch. 7 - Bank reconciliation and entries Sunshine Interiors...Ch. 7 - Continuing Company AnalysisAmazon: Days cash on...Ch. 7 - Apache: Days cash on hand Apache Corporation is an...Ch. 7 - Krispy Kreme and Dunkin: Days cash on hand Krispy...Ch. 7 - Nike, lululemon, and Under Armour: Days cash on...Ch. 7 - Ethics in Action Tehra Dactyl is an accountant for...Ch. 7 - Communication Wholesome and Happy Foods is a...

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