Assignment/Instructions You are on the finance committee of Generous Givers Char

Question

Assignment/Instructions You are on the finance committee of Generous Givers Charity, Inc. of Jackson, MS. The committee is charged with financial oversight the organization. This mission is achieved by implementing internal control policies and procedures to safeguard the cash collections and provide accurate financial reporting of cash. One of the control procedures requires that a bank reconciliation to be prepared monthly by a committee member. You have been identified as the person most qualified to perform this task. (1) Prepare the organization's bank reconciliation as of April 30, 2017 (2) Record the necessary journal entries required to update the cash balance (3) Explain, in a memo to the organization's trustee board, the steps or process you used to prepare the bank reconciliation and the effects the journal entries will have on the cash balance. Generous Givers Charity, Inc. employs a voucher system in controlling expenditures and disbursements. deposited Tuesday and Thursdays in a night depository after banking hours. All cash receipts are The data required to reconcile the bank statement as of April 30 is given from the data below: each (Source of Data is printed in capital letters and underlined) CASH BALANCE PER BOoK: Balance as of April 1 CASH RECIEPT JOURNAL Total cash collected during April $11,300.40 $16,779.58 DEPOSIT TICKETS Date and amount of each deposit in April Date Amount Date Amount Date Amount Apr 10 Apr 2 3 1,144.04 15 2,007.85 1,996.74 24 1,917.71 30 1,560.06 CHECK REGISTER Number and amount of each check issued in April: Check No. 732 733 734 735 736 Check No.Amount $327.50 515.15 401.90 771.30 506.88 725 726 727 728 729 Amount Check No. 739 740 741 742 743 $490.90 VOID 640.13 376.77 299.37 Amount $172.75 249.75 613.95 907.95 359.60

Explanation / Answer

1. Bank Reconciliation Statement as on April 30th

Bank balance as per cash book as on 1st April 11300.40

(+) Total Deposits during the month 16779.58

(-) Total checks issued for the period (9555.66)

Adjustment for unrecorded bank transactions:

(+) Notes Collected (Principal + Interest) 1375

(-) Debit memo: NSF Lil' Wayne Johnson (500)

(-) Service Charge (20)

Adjusted Balance 19379.32

Bank balance as per bank statement on April 30 19399.06

(+) Unrecorded deposits 1560.06

(-) Uncleared checks(721-445.95,739-172.75,743-359.60,744-601.50) (1579.80)

Adjusted Balance 19379.32

2. Journals Dr. Cr.

i) Bank A/c Dr. to Sundry Debtors A/c 1375 1375

(notes collected by bank including interest)

ii) NSF Lil' Wayne Johnson A/c to Bank A/c 500 500

(unrecorded debit memo being recorded)

iii) Bank Charges A/c to Bank A/c 20 20

(Service charges deducted by bank recorded)

3. Explanations

i) Bank reconcilaition statement reconciles both the cash book and bank book at a point where it should be. If all the transactions are identically recorded in these two, no difference will arise.

ii) We check whether last period's unreconciled items are cleared in this period. If not, they will form part of the reconciliation in this period too.

iii) Direct payments into and from bank haven't been recorded in cashbook, so they are adjusted in the cashbook by passing necessary journal entries.

iv) Same-wise those deposits and clearences recorded in cashbook but yet to be reflected in bankbook are adjusted accordingly in the reconciliation.

Thus, both the balances will coincide as they are having identical ingredients now.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.