The cash Coins, currency (paper money), checks, money orders, and money on depos
ID: 2600399 • Letter: T
Question
The cash
Coins, currency (paper money), checks, money orders, and money on deposit that is available for unrestricted withdrawal from banks and other financial institutions. To simplify, this chapter assumes that a company has only one bank account, which is identified in the Ledger as "Cash."
account for Coastal Bike Co. at October 1, 20Y9, indicated a balance of $5,140. During October, the total cash deposited was $39,175, and checks written totaled $40,520. The bank statement
A summary of all transactions mailed to the depositor or made available online by the bank each month.
indicated a balance of $8,980 on October 31, 20Y9. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:
If a balance sheet were prepared for Coastal Bike Co. on October 31, 20Y9, what amount should be reported as cash?
1. Prepare a bank reconciliation as of October 31, 20Y9. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Question not attempted.
Score: 7/108
Coastal Bike Co.
Bank Reconciliation
October 31, 20Y9
1
Cash balance according to bank statement
2
Adjustments:
3
4
5
6
7
8
9
Cash balance according to company’s records
10
Adjustments:
11
12
13
14
15
16
Solution
Coastal Bike Co.
Bank Reconciliation
October 31, 20Y9
1
Cash balance according to bank statement
2
Adjustments:
3
4
5
6
7
8
9
Cash balance according to company’s records
10
Adjustments:
11
12
13
14
15
16
Points:
1.56 / 24
Feedback
Set up two sections: one for the company cash account section and the other for the bank balance section. 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.
2. Journalize the necessary entries. Refer to the Chart of Accounts for exact wording of account titles.
Question not attempted.
PAGE 1
JOURNAL
ACCOUNTING EQUATION
Score: 0/87
1
2
3
4
5
6
7
Solution
1
2
3
4
5
6
7
Points:
0 / 16
Feedback
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.
3. If a balance sheet were prepared for Coastal Bike Co. on October 31, 20Y9, what amount should be reported as cash?
Points:
0 / 1
Feedback
Set up two sections: one for the company cash account section and the other for the bank balance section. 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.
A. Checks outstanding totaled $5,560. B. A deposit of $1,050 representing receipts of October 31, had been made too late to appear on the bank statement. C. The bank had collected for Coastal Bike Co. $2,120 on a note left for collection. The face of the note was $2,000. D. A check for $370 returned with the statement had been incorrectly charged by the bank as $730. E. A check for $310 returned with the statement had been recorded by Coastal Bike Co. as $130. The check was for the payment of an obligation to Rack Pro Co. on account. F. Bank service charges for October amounted to $25. G. A check for $880 from Bay View Condos was returned by the bank due to insufficient funds.Explanation / Answer
Note: Please check the exact wordings for the text entries from the Amount Descriptions list prior to submission since the same has not been provided with the question.
2.
* Please note: In absence of information provided, it is assumed that interest on note has not been accrued earlier and hence interest revenue has been credited. If interest had been accrued earlier, the credit would be to interest receivable instead of interest revenue. The entry would then be as shown below:
Note: Please check the exact wordings for the account titles from the Chart of Accounts prior to submission since the same has not been provided with the question.
3. Amount to be reported as Cash on October 31, 20Y9 balance sheet: $4830
1 Coastal Bike Co. Bank Reconciliation October 31, 20Y9 1 Cash balance according to bank statement 8980 2 Adjustments: 3 Deposit of October 31 1050 4 Bank error in charging check as $730 instead of $370 360 1410 5 10390 6 Checks outstanding -5560 7 Adjusted cash balance according to bank statement 4830 8 9 Cash balance according to company's records ($5140+$39175-$40520) 3795 10 Adjustments: 11 Note plus interest collected by bank 2120 12 5915 13 Company error in recording check as $130 instead of $310 -180 14 Bank service charges -25 15 NSF check -880 -1085 16 Adjusted cash balance according to company's records 4830Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.