The cash

Coins, currency (paper money), checks, money orders, and money on deposit that is available for unrestricted withdrawal from banks and other financial institutions. To simplify, this chapter assumes that a company has only one bank account, which is identified in the Ledger as "Cash."

account for Capstone Medical Co. at November 30, 2016, indicated a balance of $93,115. The bank statement

A summary of all transactions mailed to the depositor or made available online by the bank each month.

indicated a balance of $125,800 on November 30, 2016. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:

A.	Checks outstanding totaled $30,060.
B.	A deposit of $19,240, representing receipts of November 30, had been made too late to appear on the bank statement.
C.	The bank collected $24,075 on a $22,500 note, including interest of $1,575.
D.	A check for $1,800 returned with the statement had been incorrectly recorded by Capstone Medical Co. as $180. The check was for the payment of an obligation to ABC Supply Co. for a purchase on account.
E.	A check drawn for $390 had been erroneously charged by the bank as $930.
F.	Bank service charges for November amounted to $50.

	Instructions
1.	Prepare a bank reconciliation. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.Deduct: or Add: will automatically appear if it is 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.	If a balance sheet were prepared for Capstone Medical Co. on November 30, 2016, what amount should be reported as cash?

none

X

Chart of Accounts

CHART OF ACCOUNTS

Capstone Medical Co.

General Ledger

	ASSETS
110	Cash
111	Petty Cash
120	Accounts Receivable
131	Notes Receivable
141	Merchandise Inventory
145	Office Supplies
146	Store Supplies
151	Prepaid Insurance
181	Land
191	Office Equipment
192	Accumulated Depreciation-Office Equipment
193	Store Equipment
194	Accumulated Depreciation-Store Equipment

	LIABILITIES
211	Accounts Payable-ABC Supply Co.
221	Notes Payable
222	Interest Payable
231	Salaries Payable
241	Sales Tax Payable

	EQUITY
310	Common Stock
311	Retained Earnings
312	Dividends
313	Income Summary

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Merchandise Sold
515	Credit Card Expense
516	Cash Short and Over
520	Salaries Expense
531	Advertising Expense
532	Delivery Expense
533	Insurance Expense
534	Office Supplies Expense
535	Rent Expense
536	Repairs Expense
537	Selling Expenses
538	Store Supplies Expense
561	Depreciation Expense-Office Equipment
562	Depreciation Expense-Store Equipment
590	Miscellaneous Expense
710	Interest Expense

none

X

Amount Descriptions

Amount Descriptions
Bank error in charging check as $390 instead of $930
Bank error in charging check as $930 instead of $390
Bank service charges
Check for $930 returned because of insufficient funds
Deposit of November 30, not recorded by bank
Error in recording check
Error in recording November 30 deposit
Outstanding checks
Proceeds of note collected by bank, including $1,575 interest

none

X

Bank Reconciliation

Shaded cells have feedback.

1. Prepare a bank reconciliation. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Deduct: or Add: will automatically appear if it is required. Whenever there is more than one adjusting item in the bank portion of the reconciliation or the general ledger portion of the bank reconciliation, enter in the order presented in the instructions.

Question not attempted.

Score: 1/92

CAPSTONE MEDICAL CO.

Bank Reconciliation

November 30, 2016

1	Cash balance according to bank statement
2
3
4
5
6	Adjusted balance
7
8	Cash balance according to companys records
9
10
11
12
13	Adjusted balance

Solution

CAPSTONE MEDICAL CO.

Bank Reconciliation

November 30, 2016

1	Cash balance according to bank statement
2
3
4
5
6	Adjusted balance
7
8	Cash balance according to companys records
9
10
11
12
13	Adjusted balance

Points:

0.22 / 20

Feedback

Check My Work

Set up two columns: one for the company cash account section and the other for the bank balance section. Determine the effect of the data on each column. Recall that when you are finished, the adjusted balances in the bank and company sections of the reconciliation must be equal. If not, an item has been overlooked or treated in error.

Recall that the company's cash account balance is updated for any items in the company section of the bank reconciliation.

none

{C}

X

Journal

Shaded cells have feedback.

2. Journalize the necessary entries. The accounts have not been closed. Refer to the Chart of Accounts for exact wording of account titles.

Question not attempted.

PAGE 1

JOURNAL

Score: 0/75

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6

Solution

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6

Points:

0 / 14

Feedback

Check My Work

Keep in mind that the company needs to journalize any adjusting items in the company section of the bank reconciliation, because these have not been previously recorded by the company. Debit memo items like bank service charges decrease Cash. Items that come from credit memos like collections of notes or interest by the bank increase Cash. If the company made an error that overstates or understates cash in the company section, the journal adjustment would decrease Cash or increase Cash, respectively.

none

{C}

X

Final Question

Shaded cells have feedback.

3. If a balance sheet were prepared for Capstone Medical Co. on November 30, 2016, what amount should be reported as cash?

Points:

0 / 1

Feedback

Check My Work

Set up two columns: one for the company cash account section and the other for the bank balance section. Determine the effect of the data on each column. Recall that when you are finished, the adjusted balances in the bank and company sections of the reconciliation must be equal. If not, an item has been overlooked or treated in error. Recall that the company's cash account balance is updated for any items in the company section of the bank reconciliation