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:

Principal.................$ 2,900 

Interest.........................396 

                                  $ 3,296 

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.

Transcribed Image Text:

1. Balance per books September 30 $ 10,725 October 31 5,836 2. Balance per bank September 30 6,915 October 31 8,276 3. Outstanding checks September 30 1,811 October 31 2,615 4. Cash receipts for October per bank 28,792 per books 20,271 5. Deposits in transit September 30 5,621 October 31 996