Bank Reconciliation and Entries Sunshine Interiors deposits all cash receipts ea
ID: 2405558 • Letter: B
Question
Bank Reconciliation and Entries
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, 20Y0, 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:
Click here to see JULY BANK STATEMENT.
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. When required, enter amounts in dollars and cents.
Feedback
Set up two sections: one for the bank balance and the other for the company cash account. Determine the effect of the data on each section. 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.
Learning Objective 5.
2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. When required, enter amounts in dollars and cents. For a compound transaction, if an amount box does not require an entry, leave it blank.
Feedback
2. 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.
Learning Objective 5.
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.
Feedback
Set up two sections: one for the bank balance and the other for the company cash account. Determine the effect of the data on each section. 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.
4. Errors should be added or deducted from the bank or company section of the reconciliation depending on the nature of the error. If the bank made the error, the bank section would be adjusted. Subtract to obtain the difference between the correct and incorrect amounts. Has the bank overstated or understated the Cash balance in their records?
Learning Objective 5.
CASH ACCOUNT: Balance as of July 1 $ 9,578.00 CASH RECEIPTS FOR MONTH OF JULY 6,465.42Explanation / Answer
1
2
3. What is the amount of Cash that should appear on the balance sheet as of July 31?
$11494
4
BANK RECONCILIATION FOR PRECEDING MONTH: Sunshine Interiors Bank Reconciliation July 30, 20Y0 Cash balance according to bank statement 11601.41 Adjustments: Deposit of June 30 not recorded by bank 1177.87 Outstanding Check No. 613 137.5 Outstanding Check No. 625 837.7 Outstanding Check No. 633 310.08 Total adjustments -107.41 Adjusted balance 11494 Cash balance according to company's records 7664 Adjustments: Principalof Notes Collected 4000 Interest 160 Add Error in recoding july 23 Deposit 18 Add Error in recoding Check no 627 63 Less Check returned 375 Less Service charge 36 Total Adjsutment 3830 Adjusted Balance 11494Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.