Cash Problem 1 You have prepared the following inter-bank transfer schedule for
ID: 2453225 • Letter: C
Question
Cash
Problem 1
You have prepared the following inter-bank transfer schedule for ABC.
Transfer recorded
Check Amount
Disbursed Recorded in Books
Date Recorded by Bank
Receipt Recorded in Books
Date by Bank
1
$ 5,000.00
12/31/2013
1/4/2014
12/31/2013
12/31/2013
2
$ 10,000.00
1/4/2014
1/5/2014
12/31/2013
1/3/2014
3
$ 150,000.00
12/31/2013
1/5/2014
12/31/2014
1/4/2014
4
$ 30,000.00
1/4/2014
12/31/2013
12/13/2014
1/4/2014
What is the effect of the above on cash in bank accounts?
Transfer recorded
Check Amount
Disbursed Recorded in Books
Date Recorded by Bank
Receipt Recorded in Books
Date by Bank
1
$ 5,000.00
12/31/2013
1/4/2014
12/31/2013
12/31/2013
2
$ 10,000.00
1/4/2014
1/5/2014
12/31/2013
1/3/2014
3
$ 150,000.00
12/31/2013
1/5/2014
12/31/2014
1/4/2014
4
$ 30,000.00
1/4/2014
12/31/2013
12/13/2014
1/4/2014
Explanation / Answer
The impact of the above four transfers on cash balance would be as follows:
1) Check Amount of $5,000 - This transaction will not affect the balance of cash at bank as the bank has recorded the date of 1st January 2014. It will, therefore, form part of the reconiliation.
2) Check Amount of $10,000 - This transaction will result in an increase in the cash in bank account balance as the amount has been received by the bank in April 2014.
3) Check Amount of $150,000 - This transaction will result in a decrease in the cash in bank account balance. It will form part of reconciliation process for the Year 2013.
4) Check Amount of $30,000 - The transaction will form part of reconciliation process for the Year 2013.
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