Help Rick Hall owns a card shop, Hall's Cards. The following cash information is available for the month of August Year 1: As of August 31, the bank statement shows a balance of $16,140. The August 31 unadjusted balance in the Cash account of Hall's Cards is $14,100. A review of the bank statement revealed the following information: 1. A deposit of $4,150 on August 31, Year 1, does not appear on the August bank statement 2. It was discovered that a check to pay for baseball cards was correctly witten and paid by the bank for $4,500 but was recorded on the books as $5,400. 3. When checks written during the month were compared with those paid by the bank, three checks amounting to $5,370 were found to be outstanding 4. A debit memo for $80 was included in the bank statement for the purchase of a new supply of checks. Required Prepare a bank reconciliation at the end of August showing the true cash balance. (Negative amounts should be indicated with minus sign.) HALL'S CARDS Bank Reconciliation August 31, Year 1 Unadjusted Bank Balance, August 31, Year 1 True Cash Balance, August 31, Year 1 Unadjusted Book Balance, August 31, Year 1 True Cash Balance, August 31, Year 1 The following data apply to Pro Beauty Supply Inc. for May Year 1: 1. Balance per the bank on May 31: $9,150. 2. Deposits in transit not recorded by the bank: $1,510. 3. Bank error; check written by Best Beauty Supply was charged to Pro Beauty Supply's account: $560. 4. The following checks written and recorded by Pro Beauty Supply were not included in the bank statement: 3013 3054 3056 $ 510 640 1,520 5. Note collected by the bank: $500. 6. Service charge for collection of note: $20. 7. The bookkeeper mistakenly recorded a check for $230 but the check was correctly written for May utilities in the amount of $320. 8. Bank service charge in addition to the note collection fee: $40. 9. Customer checks returned by the bank as NSF: $310. Required Determine the amount of the unadjusted cash balance per Pro Beauty Supply's books. Unadjusted cash balance Next The following items were included in Wong Company's January Year 1 bank reconciliation Required Determine whether each item will require adjustments to the book balance of Wong's cash account and indicate the amount of any necessary adjustment (Amounts to be deducted should be indicated with a minus sign.) a. Service charges of $50 for the month of January were listed on the bank statement b. The bank charged a $250 check drawn on Wing Restaurant to Wong's account. The check was included in Wong's bank statement. c. A check of $62 was returned to the bank because of insufficient funds and was noted on the bank statement. Wong received the check from a customer and thought that it was good when it was deposited into the account. d. A $990 deposit was recorded by the bank as $980. e. Four checks totaling $810 written during the month of January were not included with the January bank statement. f. A $75 check written to Office Max for office supplies was recorded as $57. g. The bank statement indicated that the bank had collected a $450 note for Wong. h. Wong recorded $900 of receipts on January 31, Year 1, which were deposited in the night depository of the bank. These deposits were not included in the bank statement. Amount Added Reconciling Items Book Balance Adjusted? Subtracted? a. b. c. d. e. f. 9 h The following information is available for Park Valley Spa for July, Year 1: BANK STATEMENT STATE BANK BOLTA VISTA, NV 10001 Park Valley Spa 10 Main Street Bolta Vista, NV 10001 Beginning balance 6/30/Year 1 Total deposits and other credits Total checks and other debits Ending balance 7/31/Year 1 Checks and Debits Check No. Amount 2350 $3,761 2351 1,643 2352 8,000 2354 2,894 2355 1,401 2357 6, 187 DM 16 es Account number 12-4567 July 31, Year 1 $ 9,031 29,800 23,902 14,929 Deposits and Credits Date Amount July 1 $1,102 10 6,498 July 15 4,929 July 21 6,174 July 26 5,963 July 30 2,084 CM 3,050 July The following is a list of checks and deposits recorded on the books of the Park Valley Spa for July, Year 1: Date July 2 July 4 July 10 July 10 July 15 July 20 July 22 Check No. 2351 2352 2353 2354 2355 2356 2357 Amount of Check $1,643 8,000 1,500 2,894 1,401 745 6,187 Date July 8 July 14 July 21 July 26 July 29 July 30 Amount of Deposit $6,498 4,929 6,174 5,963 2,084 3,550 Other Information Other Information 1. Check no 2350 was outstanding from June. 2. The credit memo was for collectic of notes receivable. 3. All checks were paid at the correct amount. 4. The debit memo was for printed checks. 5. The June 30 bank reconciliation showed a deposit in transit of $1,102. 6. The unadjusted Cash account balance at July 31 was $13,200. Required Prepare the bank reconciliation for Park Valley Spa at the end of July. (Negative amounts should be indicated with minus sign.) PARK VALLEY SPA Bank Reconciliation July 31, Year 1 Unadjusted Bank Balance, July 31, Year 1 True Cash Balance, July 31, Year 1 Unadjusted Book Balance, July 31, Year 1 True Cash Balance, July 31, Year 1 Following is a bank reconciliation for Zocar Enterprises for June 30, Year 1: Cash Account $ 1,918 Bank Statement $ 3,000 600 (1,507) Balance as of /Year 1 Deposit in transit Outstanding checks Note collected by bank Bank service charge NSF check Adjusted cash balance as of 6/30/Year 1 2,000 (25) (1,800) $ 2,093 $ 2,093 When reviewing the bank reconciliation, Zocar's auditor was unable to locate any reference to the NSF check on the bank statement. Furthermore, the clerk who reconciles the bank account and records the adjusting entries could not find the actual NSF check that should have been included in the bank statement. Finally, there was no specific reference in the accounts receivable supporting records identifying a party who had written a bad check. Required a. Prepare the adjustment that the clerk would have made to record the NSF check. accounts receivable by Adjustment to and cash by Hele should have been included in the bank statement. Finally, there was no specific reference in the accounts receivable supporting records identifying a party who had written a bad check. Required a. Prepare the adjustment that the clerk would have made to record the NSF check. Adjustment to accounts receivable by and cash by c. Assume the clerk had stolen $1,800 cash, and recorded an entry for a nonexistent NSF check to reduce the cash balance so that it would match the bank balance. Select the internal control practice that would have most likely prevented this fraud. Separation of duties Maintaining a bank signature card. Hiring competent employees. O Performance evaluations. O Required vacation. Check my work Austin Co. established a petty cash fund by Issuing a check for $300 and appointing Steve Mack as petty cash custodian. Mack had vouchers for the following petty cash payments during the month: Stamps Miscellaneous items Employee supper money Taxi fare Window-washing service $ 62 20 70 so 75 There was $21 of currency in the petty cash box at the time it was replenished. The four distinct accounting events affecting the petty cash fund for the period were (1) establishment of the fund, (2) reimbursements made to employees, (3) recognition of expenses (Note: all expenses are recorded in total as miscellaneous expense), and (4) replenishment of the fund. Assume the Company uses the traditional approach to petty cash expense recognition and replenishment. Required a. Show each of the four events in a horizontal statements model C. Identify the events depicted in Requirement a as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). Complete this question by entering your answers in the tabs below. Required A Required c Show each of the four events in a horizontal statements model. (Enter any decreases to account balances with a minus sign. For changes on the Statement of Cash Flows whether the item is an operating activity (OA), investing activity (IA), financing activity (FA), or pave the cell blank if there is no effect.) AUSTIN CO. Horizontal Statements Model Effect of Events on the Financial Statements Income Statement Balance Sheet Check my Austin Co. established a petty cash fund by issuing a check for $300 and appointing Steve Mack as petty cash custodian, Mack had vouchers for the following petty cash payments during the month: Stamps Miscellaneous items Employee supper money Taxi fare Window-washing service $ 62 20 70 50 75 ces There was $21 of currency in the petty cash box at the time it was replenished. The four distinct accounting events affecting the petty cash fund for the period were (1) establishment of the fund, (2) reimbursements made to employees, (3) recognition of expenses (Note: all expenses are recorded in total as miscellaneous expense), and (4) replenishment of the fund. Assume the Company uses the traditional approach to petty cash expense recognition and replenishment Required a. Show each of the four events in a horizontal statements model. c. Identify the events depicted in Requirement a as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). Complete this question by entering your answers in the tabs below. Required A Required C Identify the events depicted in Requirement a as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). (Select "NE" if there is no effect.) Type of Event Event Number 1. 2 3.