Prepare the bank reconciliation as of July 31. (List items that increase balance as per bank & books first.)
Prepare a correct bank reconciliation. (Hint: Deduct the amount of the theft from the adjusted balance per books.) (List items that increase balance as per bank & books first.)
On July 31, 2022, Wildhorse Co. had a cash balance per books of $6,290.00. The statement from Dakota State Bank on that date showed a balance of $7,840.80. A comparison of the bank statement with the Cash account revealed the following facts. 1. 2. 3. 4. The bank service charge for July was $18.00. The bank collected $1,670.00 from a customer for Wildhorse Co. through electronic funds transfer. The July 31 receipts of $1,350.30 were not included in the bank deposits for July. These receipts were deposited by the company in a night deposit vault on July 31. Company check No. 2480 issued to L. Taylor, a creditor, for $354.00 that cleared the bank in July was incorrectly entered in the cash payments journal on July 10 for $345.00. Checks outstanding on July 31 totaled $1,983.10. On July 31, the bank statement showed an NSF charge of $725.00 for a check received by the company from W.Krueger, a customer, on account. 5. 6. Crane Company is a very profitable small business. It has not, however, given much consideration to internal control. For example, in an attempt to keep clerical and office expenses to a minimum, the company has combined the jobs of cashier and bookkeeper. As a result, Bret Turrin handles all cash receipts, keeps the accounting records, and prepares the monthly bank reconciliations. The balance per the bank statement on October 31, 2022, was $18.890.00. Outstanding checks were No. 62 for $149.00, No. 183 for $171.00, No. 284 for $262.00, No. 862 for $222.00, No. 863 for $277.00, and No. 864 for $202.00. Included with the statement was a credit memorandum of $209.00 indicating the collection of a note receivable for Crane Company by the bank on October 25. This memorandum has not been recorded by Crane. The company's ledger showed one Cash account with a balance of $22,311.00. The balance included undeposited cash on hand. Because of the lack of internal controls, Bret took for personal use all of the undeposited receipts in excess of $3,803.00. He then prepared the following bank reconciliation in an effort to conceal his theft of cash. Cash balance per books, October 31 $22,311.00 Add: Outstanding checks No. 862 $222.00 No. 863 277.00 No. 864 202.00 591.00 22,902.00 Less: Undeposited receipts 3,803.00 Unadjusted balance per bank, October 31 19.099.00 Less: Bank credit memorandum 209.00 Cash balance per bank statement, October 31 $18,890.00 (a) Prepare a correct bank reconciliation. (Hint: Deduct the amount of the theft from the adjusted balance per books.) (List items that increase balance as per bank & books first.)
