Hello I need the soulutions for Survey of Accounting 7th chapter 5 problem 3 The

Question

Hello I need the soulutions for Survey of Accounting 7th chapter 5 problem 3

The cash account for All American Sports Co. on April 1, 20Y5, indicated a balance of $23,600. During April, the total cash deposited was $80,150, and checks written totaled $72,800. The bank statement indicated a balance of $40,360 on April 30, 20Y5. Comparing the bank state- ment, the canceled checks, and the accompanying memos with the records revealed the fol- lowing reconciling items:

a. Checks outstanding totaled $14,300.

b. A deposit of $9,275, representing receipts of April 30, had been made too late to appear on the bank statement.

c. A check for $720 had been incorrectly charged by the bank as $270. d. A check for $110 returned with the statement had been recorded by All American Sports Co. as $1,100. The check was for the payment of an obligation to Garber Co. on account.

e. The bank had collected for All American Sports Co. $4,320 on a note left for collection. The face of the note was $4,000.

f. Bank service charges for April amounted to $75. g. A check for $1,300 from Bishop Co. was returned by the bank because of insufficient fund

Instructions 1. Prepare a bank reconciliation as of April 30. 2. Illustrate the effects on the accounts and financial statements of the bank reconciliation.

Explanation / Answer

2. Effects of Bank Reconcilation on Accounts and financial statement

- BR is prepared to check the accruacy of the acconts of the company and financial statement.

- It is a toll of internal controll for the company to keep it bank and cash accounts intact.

-By preparing BR, company can know the bank charges and other charges on timely and can take suitable steps if they are charges wrongly.

- By BR, compnay can maintain Suffecient bank balance in its bank account to honoured its outstanding checks.

- Auditor also verify the cash balacne recorded n financial statemetn by BR only.

Bank reconciliation Statement as of April 30. Amount ($) Sno Particulars Debit Credit Balance 1st April Balance of Cash Account as on 1st april 23600 Add: Total cash depositecd 80150 Less: Checks written 72800 Balance of Cash Account as on 30 april 30950 Sno Particulars Add Less Amount ($) Balance of Cash Account 30950 Add: d Check recorde for high value(1100-110) 990 Add: e Notes collected 4320 less f bank service charges 75 less g Check returned 1300 Total 5310 1375 Adjusted Cash Balance 34885 Sno Particulars Add Less Amount ($) Balance As per Bank 40360 Add b Depsoit in transit 9275 Less: a Outstanding Checks 14300 Less: c Bank Error (720-270) 450 Less: Extra collection Less: d Adjusted bank Balance 9275 14750 34885

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