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Part Four Instructions In this part of the practice set, the student will prepare a Bank Reconciliation for the month of January. Prepare it in Word or Excel and use the ending balance in your cash account for the cash for your books. Be prepared to turn in the Bank Reconciliation after answering the questions in Blackboard, upload the Bank Reconciliation. Requirements 1. Make sure you have corrected any errors on your journal and adjusting Journal entries and have the correct balance for the cash account before starting the Bank Reconciliation. Please use the correct balance in the cash account to start on the book side of the reconciliation 2. Bank Reconciliation: Using the cash balance per books and the bank statement, prepare a bank reconciliation. A template you can use to create a Bank reconciliation is located at the at the bottom of this page. 3. Record Bank Reconciliation Adjustments: After you have prepared the bank reconciliation you must make any adjusting lournal entries to your cash account by entering them in the general Journal of the practice set so that the general ledger cash account agrees with the bank reconciliation Once you finish the Bank Reconciliation follow the instructions below: Step 1: Use the template below to create an Excel spreadsheet or Word document to show the reconciled balance using the Bank Statement and the correct ending balance in the cash account. Step 2: Use the Excel spreadsheet or Word document to answer the questions in Blackboard in the content folder in the corresponding week. Step 3: Once you complete entering information click on the "Practice Set" tab on the navigation pane Step 4: When it opens, click on the corresponding assignment of the practice set Step 5: Once the assignment opens, scroll down and click on "Browse Local Files" Step 6: When you are done uploading the files, scroll down and click on the "Submit" button Template for Bank Reconciliation Western Bank Balance "Rocking Roller Blades" Ending Cash Balance on Bank Statement Ending Cash Balance in T-Account Deposits in Transit Adjustments or Errors +/- Outstanding Checks Reconciled Balance Adjustments or Errors + Reconciled Balance Bank Statement Western Bank Page 1 PO Box 12345 El Paso, Texas 79998-2345 Rocking' Roller Blades 123 Main Avenue El Paso, Texas 79945 WESTERN BANK STATEMENT "Rockin' Roller Blades" Balance beginning Deposits and other credits Checks and other debits Balance on statement date 01/01/2021 January January 01/31/2021 $0 $105,307,25 $66,530.00 $38.777.25 Deposits Added 1/2/2021 Deposit $36.000.00 1/3/2021 Deposit 2 $20,000.00 1/14/2021 Deposit $21.433.50 1/23/2021 Deposit 4 $16.237.50 1/27/2021 Deposit 5 $11.636,25 Wells Fargo Bank Statement-Checks Paid and other Debits 1001 $12,000.00 1007 $11,000.00 1002 $6,000.00 1008 $225.00 1003 $1,000.00 1009 $250.00 1004 $10,000.00 1012 $23.685.00 1005 $550.00 DM $70 Check Printing Fee 1006 $1,000.00 NSF $750.00 *Assume any errors are made by the bank - G.Estrada.pdf Download Print Save to OneDrive Date Deposit No. Check No. 1. 1/02/2021 2. 1/02/2021 Deposit #1 Description Ms. Blade met with her lawyer and CPA for advice on starting the business. The lawyer told Ms. Blade to register the company name Rockin' Roller Blades with the County of El Paso. In addition, Ms. Blade will get an employer identification number (EIN) from the Internal Revenue Service and get a sales tax permit from the state of Texas. Ms. Blade opened a business checking account at Western Bank by depositing S36,000. The corporation issued her a stock certificate for 9,000 shares of common stock with no par value. Ms. Blade signed a one-year rental. She was required to pay $12,000 for rent for the months of January 1, 2021 - April 30, 2021. Arranged for a general business liability insurance policy and paid $6,000 to State Penn Insurance. This premium is for twelve months coverage Signed a note payable to borrow $20,000 from Western Bank. Interest is 10% annually and the note is to be repaid with interest in twelve months. (Interest will be calculated and shown as an adjusting journal entry) Purchased Office Supplies $2,800 on account 3. 1/03/2021 Ck #1001 4. 1/03/2021 Ck #1002 5. 1/03/2021 Deposit #2 6. 1/05/2021 4 Page 7. 1/05/2021 8. 9 1/05/2021 Ck #1003 1/06/2021 Ck #1004 10. 1/06/2021 11. 1/08/2021 Ck #1005 Purchased metal shelving on account for $3,000. It will be depreciated over 5 years using straight-line depreciation and it will have $500 of salvage value at the end of 5 years. Depreciation will be calculated at the end of the month and in the adjusting journal entries. Purchased Shipping Supplies $1,000 Purchased land for a future building site $75,000; paying $10,000 in cash and giving a note payable from Western Bank for the remainder. The bank note will carry 10% interest and will be repaid in 9 months. The first month of interest will be paid in the adjusting journal entries at the end of the month. Purchased a new computer system that cost $6,255 from Computer Inc. for use in the business. Ms. Blade signed a 6 month, 10% note payable for the cost of the system. The computer system has an estimated useful life of five years the residual (salvage) value is $400. This will be recorded as Computer Equipment. Depreciation and interest will be an adjusting journal entry using straight-line depreciation to be repaid with interest in twelve months and will be done at the end of the month. Arranged for Move West to make the delivery of the computer system and paid the delivery charge of $550. This charge should be added to the cost of the computer equipment purchased and depreciated on the same basis as the computer equipment. The depreciation will be calculated in the adjusting journal entries at the end of the month. Purchased 230 merchandise inventory-orange roller blades for $6,900 account. The vendor did not extend credit terms. Purchased 250 merchandise inventory-black roller blades for $7,500 of on account. There were no credit terms for prompt payment. Ms. Blade received and paid the $1,000 charge from her lawyer. Purchased a used truck for 11,000 using cash. The truck will be depreciated over 2 years. The depreciation will be straight-line and will be an adjusting journal entry at the end of the month Rockin' Roller Blades is now open for business. Sold merchandise for $19,800 cash. Sales Tax was $1,633.50. The cost of the Roller Blades is $9,900; the cost of the Orange Roller Blades is $3.900 Part of this sale must be delivered to the customer. The merchandise will be shipped FOB destination. Paid $225 to ship the merchandise Purchased additional orange roller blades on account for $6,000. Credit terms were 2/15, 1/30. Assume credit terms will be used. Purchased additional black roller blades on account for $11,500. Credit terms were 1/15, 1/30. Assume credit terms will be used. 12. 1/08/2021 13. 1/09/2021 14. 1/13/2021 Ck #1006 15. 1/14/2021 Ck #1007 16. 1/14/2021 17. 1/14/2021 Deposit 13 18. 1/16/2021 Ck #1008 19. 1/16/2021 20. 1/17/2021 21. 1/20/2021 Deposit #4 22. 1/22/2021 Ck #1009 23. 1/23/2021 24. 1/26/2021 Ck #1010 25. 1/27/2021 Deposit #5 Recorded cash sales that totaled $15,000. Sales tax is $1,237.50. The cost of merchandise sold was $7,500 (orange blades were $3,750; black blades were $3,750). Ms. Blade signed up for a Roller Blade Exhibition. She paid the registration fee of $250 Ms. Blade participated in a roller blade exhibition held at the convention center sponsored by the Chamber of Commerce. She felt this was a good way to publicize her new business. The cost to participate was $800 and she considers this an Advertising expense and paid on account. Paid for the roller blades purchased on 1/09/2021. Ms. Blade recorded cash sales totaling $10,500. Sales tax is $866.25. The cost of the merchandise sold was $5,250 (orange blades $2,250; black blades $3,000) Paid the Advertising expense billed on account in transaction #23. Paid the balance due for the roller blades. There are three invoices American Express sent a bill for $235 for gasoline expense and the bill was paid. Received but did not pay the utility bill for the month, $445. Paid the first monthly installment on the computer equipment. $52.13 is for interest and $1,042.50 is for principal. Recorded sales made for the last week of the month. Sales tax is $891. Thtal cash sales were $10,800. The cost of the merchandise sold was $5,400 (orange blades $1,650; black blades $3,750). Paid the sales tax to the proper taxing authority Declared and paid a cash dividend of $200 to Ms. Blade. 26. 1/27/2021 Ck # 1011 27. 1/27/2021 Ck #1012 28. 1/30/2021 Ck #1013 29. 1/30/2021 30. 1/30/2021 Ck #1014 31. 1/30/2021 Deposit #6 32. 1/31/2021 Ck #1015 33. 1/31/2021 Ck #1016