INTERNAL CONTROL AND CASH 273 TIVE REVIEW PROBLEM: CHAPTER 6 CUMULATIVE of this

Question

INTERNAL CONTROL AND CASH 273 TIVE REVIEW PROBLEM: CHAPTER 6 CUMULATIVE of this problem is to procide an opportunity to revlew both new concepts in the current anding or concepts in precious chapters. This aamulatie retiew should assist you in grating iccounting concepts and preparing for exams, A partially Use the following data for the next five questions completed bank reconciliation for FAY Company at April 30, 2011, as well as additional data necessary to answer the questions, follow FAY COMPANY April 30, 2011 Balance per booksn $ 4,650 Add Adjusted cash b Balance per bank statemen$ 4510 Add: Deduct Adjustod cash balance 4730 Differences between book records and bank statement on April 30, 2011 are as follows: a. Credit memo of $1,100 for a note collected by the bank and credited to Fay's account. $1,000 i for principal on the note and $100 is for interest. b. Deposits in transit at April 30, 2011, totaled $1,820. e Outstanding checks at April 30, 2011 totaled $1,600. d. Check no. 1233 (for supplies) was written for $700 but erroneously recorded in Fay's records s $450. e. The bank returned an NSF check of Frank Dell, one of Fay's customers. The amount was $700. E. Bank service charge for April, $30. 8 Debit memo for $60 or safe deposit box rental at bank Credit memo for $20 for interest income on Fay's account. REQUTRED: Answer each of the nest 5 questions 1. In Fays complete h. ays completed bank reconciliation at April 30, 2011, what dollar amount should be icted from the balance per bank statement [indicated by (4) abovelP In Fay's completed bank reconciliation at April 30, 2011, what dollar amount should be added to the e balance per Fay's records [indicated by (1) abovelP

Explanation / Answer

Corrected cash balance is below:

Answer for question (1) is 1,120 and for (2) is 1040

Bank reconciliation is below:

Thus, answer for (3) is 1820 and for (4) is 1600.

Entry is:

Cash balance 4650 Add: Note collected by bank 1100 Credit memo for interest 20 Total Add (1) 1120 Less: Check correction -250 NSF check -700 Service charge -30 Safe deposit rent -60 Total Deduct (2) -1040 Cash balance 4730

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