Chapter 7 Sarbanes-Oxley, Internal Control, and Cash PR 7-5A Bank reconcilation
ID: 2403181 • Letter: C
Question
Chapter 7 Sarbanes-Oxley, Internal Control, and Cash PR 7-5A Bank reconcilation and entries Beeler Furniture Company deposits all cash receipts each Wednesday and Fridatme night depository, after banking hours. The data required to reconcile the bank sta as of June 30 have been taken from various documents and records and are rejwri as follows. The sources of the data are printed in capital letters. All checks were for payments on account 1.Adjusted alance: $13,216 duced CASH ACCOUNT Balance as of June 1 CASH RECEIPTS FOR MONTH OF JUNE DUPLICATE DEPOSIT TICKETS $9,317.40 59,223.76 Date and amount of each deposit in June June 1 $1,080.50 June 10$ 996.61 882.95 1,606.74 June 22 $897.34 854.17 947.21 1,117.74 17 CHECKS WRITTEN: Number and amount of each check issued in June Check No. Check No. Check No. 5237.50 495.15 501.90 761.30 506.88 117.25 298.66 4Vold 5450.90 640.13 276.77 299.37 537.01 380.95 449.75 272.75 113.95 407.95 259.60 901.50 486.39 58,395.66 750 751 752 753 755 756 757 758 760 Total amount of checks issued in June BANK RECONCILIATION FOR PRECEDING MONTH: Beeler Furniture Company Bank Reconciliation May 31, 20- Cash balance according to bank statement Add deposit for May 31, not recorded by bank.. $ 9,447.20 690.25 $10,137 A5 Deduct outstanding checks No. 731 736 738 739 $162.15 345.95 25140 60.55820.05 9,31740 9.352.50 Cash balance according to company's records. Deduct service charges Adjusted balance... $9,317.40 Instructions 1. Prepare a bank reconciliation as of June 30. If errors in recording deposits or checks are discovered, assume that the errors were made by the company. Assume that all its are from cash sales. All checks are written to satisfy accounts payable. 2. Journalize the necessary entries. The accounts have not been closed. 3. What is the amount of Cash that should appear on the balance sheet as of June 30P ume that a canceled check for $390 has been incorrectly recorded by the bank as $930. Briefly explain how the error would be included in a bank reconcilia- 4 Ass tion and how it should be corrected.Explanation / Answer
1) BANK RECONCILIATION STATEMENT Balance as per ledger (9317.40+9223.76-8395.66) 10145.50 Balance as per bank statement 13624.71 Add: Add: Mistake in check # 743 (761.30-671.30) 90.00 Deposit in transit 1117.74 1117.74 Miscellaneous (3500+210) 3710.00 3800.00 14742.45 13945.50 Less: Cheques outstanding: Less: 738 251.40 Overrecoding of deposit on June, 10 (996.61-896.61) 100.00 747 0 Overrecoding of deposit on June, 24 (947.21-942.71) 4.50 756 113.95 NSF cheque 550.00 758 259.60 Bank service charges 75.00 729.50 759 901.50 1526.45 Adjusted balance as per ledger 13216.00 Adjusted balance as per bank statement 13216.00 2) Debit Credit Cash 90.00 Accounts payable 90.00 (To rectify mistake in check #743) Cash 3710.00 Miscellaneous receipts (Details not given) 3710.00 (To record miscellaneous credit) Accounts receivable 550.00 Cash 550.00 (To record NSF check) Bank service charges 75.00 Cash 75.00 (To record bank service charges) Sales revenue 104.50 Cash 104.50 (To rectify mistake in deposit figures of June 10 and June 24) 3) Amount of cash to appear on the Balance sheet as on June 30 = 13216.00 4) The error should be corrected by the bank. It should be shown as addition to the Balance as per bank. No entry is required in the books of accounts of the firm as it is a mistake on the bank's part.