Question
Sunshine Interiors deposits all cash receipts each Wednesday and Friday in a night depository, after banking hours. The data required to reconcile the bank statement
Sunshine Interiors deposits all cash receipts each Wednesday and Friday in a night depository, after banking hours. The data required to reconcile the bank statement as of July 31 have been taken from various documents and records and are reproduced as follows. The sources of the data are printed in capital letters. All checks were written for payments on account.
BANK RECONCILIATION FOR PRECEDING MONTH (DATED JUNE 30): | ||
Cash balance according to bank statement | $9,422.80 | |
Add deposit of June 30, not recorded by bank | 780.80 | |
$10,203.60 | ||
Deduct outstanding checks: | ||
No. 580 | $310.10 | |
No. 602 | 85.50 | |
No. 612 | 92.50 | |
No. 613 | 137.50 | 625.60 |
Adjusted balance | $ 9,578.00 | |
Cash balance according to companys records | $ 9,605.70 | |
Deduct service charges | 27.70 | |
Adjusted balance | $ 9,578.00 |
CASH ACCOUNT:
| |||
CASH RECEIPTS FOR MONTH OF JULY: $6,465.42 |
DUPLICATE DEPOSIT TICKETS:
Date and amount of each deposit in July:
Date | Amount | Date | Amount | Date | Amount | ||
---|---|---|---|---|---|---|---|
July 2 | $569.50 | July 12 | $580.70 | July 23 | $713.45 | ||
5 | 701.80 | 16 | 600.10 | 26 | 601.50 | ||
9 | 819.24 | 19 | 701.26 | 31 | 1,177.87 |
CHECKS WRITTEN: Number and amount of each check issued in July:
Check No. | Amount | Check No. | Amount | Check No. | Amount | ||
---|---|---|---|---|---|---|---|
614 | $243.50 | 621 | $309.50 | 628 | $837.70 | ||
615 | 350.10 | 622 | Void | 629 | 329.90 | ||
616 | 279.90 | 623 | Void | 630 | 882.80 | ||
617 | 395.50 | 624 | 707.01 | 631 | 1,081.56 | ||
618 | 435.40 | 625 | 158.63 | 632 | 325.40 | ||
619 | 320.10 | 626 | 550.03 | 633 | 310.08 | ||
620 | 238.87 | 627 | 381.73 | 634 | 241.71 | ||
Total amount of checks issued in July: $8,379.42
JULY BANK STATEMENT:
Click here to view.
Required: | |
1. | Prepare a bank reconciliation as of July 31. If errors in recording deposits or checks are discovered, assume that the errors were made by the company. Assume that all deposits are from cash sales. All checks are written to satisfy accounts payable. Refer to the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. (Note: Deduct, Add, No. or colons (:) will automatically appear if required.) |
2. | Journalize the necessary entries. The accounts have not been closed. Refer to the Chart of Accounts for exact wording of account titles. |
3. | What is the amount of Cash that should appear on the balance sheet as of July 31? |
4. | Assume that a canceled check for $180 has been incorrectly recorded by the bank as $1,800. Select how the error would be included in a bank reconciliation and how it should be corrected. |
CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUNSHINE INTERIORS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Labels | |
Cash and cash equivalents | |
Outstanding checks | |
Proceeds of note collected by bank | |
Amount Descriptions | |
Adjusted balance | |
Check returned because of insufficient funds | |
Deposit of July (insert day), not recorded by bank | |
Error in recording Check No. (insert check number) | |
Error in recording July (insert day) deposit | |
Interest | |
Principal | |
Service charges | |
(Check numbers are valid Amount Descriptions; | |
No. will appear automatically) |
1. Prepare a bank reconciliation as of July 31. If errors in recording deposits or checks are discovered, assume that the errors were made by the company. Assume that all deposits are from cash sales. All checks are written to satisfy accounts payable. Refer to the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. (Note: Deduct, Add, No. or colons (:) will automatically appear if required.)
SUNSHINE INTERIORS |
Bank Reconciliation |
July 31, 2016 |
1 | Cash balance according to bank statement |
| |
2 |
| ||
3 |
|
| |
4 |
|
| |
5 |
| ||
6 |
| ||
7 | |||
8 |
| ||
9 |
|
|
|
10 | Cash balance according to companys records |
| |
11 |
|
| |
12 |
| ||
13 |
| ||
14 |
| ||
15 | |||
16 |
|
| |
17 |
| ||
18 | |||
19 |
|
2. Journalize the necessary entries. The accounts have not been closed. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 1
JOURNAL
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | |
---|---|---|---|---|---|
1 |
| ||||
2 |
| ||||
3 |
| ||||
4 |
| ||||
5 |
| ||||
6 |
| ||||
7 |
| ||||
8 |
|
3. What is the amount of Cash that should appear on the balance sheet as of July 31?
4. Assume that a canceled check for $180 has been incorrectly recorded by the bank as $1,800. Select how the error would be included in a bank reconciliation and how it should be corrected.
Treatment:
Addition to cash per bank statement
Deduction from cash per companys records
Deduction from cash per bank statement
Addition to cash per companys records
Not included in a bank reconciliation
To correct:
Journalize an entry adding $540 to cash
Journalize an entry deducting $540 from cash
Journalize an entry deducting $930 from cash
Request that the bank correct the error
Journalize a correcting entry adding $930 to cash
Deduct from the amount of bank service charges
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started