Question
Bank Reconciliation and Entries The cash account for Collegiate Sports Co. on November 1, 20Y9, indicated a balance of $11,860. During November, the total cash
Bank Reconciliation and Entries
The cash account for Collegiate Sports Co. on November 1, 20Y9, indicated a balance of $11,860. During November, the total cash deposited was $65,030 and checks written totaled $60,380. The bank statement indicated a balance of $22,050 on November 30, 20Y9. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:
- Checks outstanding totaled $9,820.
- A deposit of $8,000, representing receipts of November 30, had been made too late to appear on the bank statement.
- A check for $850 had been incorrectly charged by the bank as $580.
- A check for $580 returned with the statement had been recorded by Collegiate Sports Co. as $850. The check was for the payment of an obligation to Ramirez Co. on account.
- The bank had collected for Collegiate Sports Co. $4,230 on a note left for collection. The face of the note was $3,900.
- Bank service charges for November amounted to $70.
- A check for $980 from Hallen Academy was returned by the bank because of insufficient funds.
Instructions:
1. Prepare a bank reconciliation as of November 30, 20Y9.
Collegiate Sports Co. | ||
Bank Reconciliation | ||
November 30, 20Y9 | ||
Cash balance according to bank statement | ||
Add: Deposit in transit on November 30 | ||
Deduct: Outstanding checks | ||
Deduct: Bank error in charging check as $580 instead of $850 | ||
Total deductions | ||
Adjusted balance | ||
Cash balance according to company's records | ||
Add: Note collected by bank, including $330 interest | ||
Add: Error in recording check as $850 instead of $580 | ||
Total additions | ||
Add: Check returned because of insufficient funds | ||
Deduct: Bank service charges | ||
Total deductions | ||
Adjusted balance |
2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. If an amount box does not require an entry, leave it blank. |
a. 20Y9 Nov. 30 | Cash | ||
Notes Receivable | |||
Interest Revenue | |||
Accounts Payable-Ramirez Co. | |||
b. Nov. 30 | Accounts Receivable-Hallen Academy | ||
Miscellaneous Expense | |||
Cash |
3. If a balance sheet were prepared for Collegiate Sports Co. on November 30, 20Y9, what amount should be reported as cash?
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