You arc the senior auditor-in-charge of the July 31, 20XO, audit of Reliable Aut
ID: 2741028 • Letter: Y
Question
You arc the senior auditor-in-charge of the July 31, 20XO, audit of Reliable Auto Parts, Inc. Your newly hired staff assistant reports to you that she is unable to complete the four-column proof of cash for the month of April 20XO, which you instructed her to do as part of the consideration of internal control over cash.
Your assistant shows you the working paper that she has prepared. Your review of
your assistant's work reveals that the dollar amounts of all the items in her working paper arc correct. You learn that the accountant for Reliable Auto Parts. Inc., makes no journal entries for bank service charges or note collections until the month following the bank 's
recording of the item. In addition, Reliable’s accountant makes no journal entries whatsoever for NSF checks that are redeposited and cleared. Your assistant's working paper appears below.
Prepare a corrected four-column proof of cash in good form for Reliable Auto Parts,Inc.for the month of April 20XO.
RELIABLE AUTO PARTS,INC.
Proof of (.ash for April 20XO
July 31,20XO
Balance 3/31/XO
Deposits
Checks
Balance
4/30/XO
Per bank statement
$ 71,682.84
$61,488.19
$ 68,119.40
$ 65,051.63
Deposits in transit:
At 3/31/XO
2,118.1B
(2,118.18)
At 4/30/XO
4,918 .16
4,91B.16
Outstanding checks: At 3/31/XO
At 4/30/XO
Bank service charges:
March 20XO April20XO
Note receivable collected
(14,888.16) 14,888.16
(22,914.70) 22,914.70
(22.18) 22.18
(19.14) 19.14
by bank 4/30/XO
NSF check of customer
18,180.00
18,180.00
L. G.Waite, charged
back by bank 3/31/XO,
redeposited and cleared 4/3/XO
(418.19)
418.19
Balances as computed
58,472.49
85,004.54
60,095.90
108,964.45
Balances per book
59,353.23
45,689.98
76,148.98
28,894.23
Unallocated difference
$ (880.74)
$39,314.56
$(16.053 .08)
$ 80,071.22
Balance 3/31/XO
Deposits
Checks
Balance
4/30/XO
Per bank statement
$ 71,682.84
$61,488.19
$ 68,119.40
$ 65,051.63
Deposits in transit:
At 3/31/XO
2,118.1B
(2,118.18)
At 4/30/XO
4,918 .16
4,91B.16
Explanation / Answer
RELIABLE AUTO PARTS, INC.
Corrected Proof of Cash for April, 200X
July 31, 200X
Balance
3/31/9X
Deposit
Checks and
Debits
Balance
4/30/9X
Per bank statement
71682.84
61488.19
68119.40
65051.63
Deposits in transit:
At 3/31/9X
2118.18
(2118.18)
At 4/30/9X
4918.16
4918.16
Outstanding checks
At 3/31/9X
(14888.16)
(14888.16)
At 4/30/9X
22914.70
(22914.70)
Bank service charges
March, 200X
22.18
22.18
April, 200X
(19.14)
19.14
Note receivable collected
by bank 4/30/9X
(18180.00)
(18180.00)
NSF check of customer L. G
Waite, charged back by
bank 3/31/9X, redeposited
and cleared 4/3/9X
418.19
(418.19)
Per Books
59353.23
45689.98
76148.98
28894.23
Balance
3/31/9X
Deposit
Checks and
Debits
Balance
4/30/9X
Per bank statement
71682.84
61488.19
68119.40
65051.63
Deposits in transit:
At 3/31/9X
2118.18
(2118.18)
At 4/30/9X
4918.16
4918.16
Outstanding checks
At 3/31/9X
(14888.16)
(14888.16)
At 4/30/9X
22914.70
(22914.70)
Bank service charges
March, 200X
22.18
22.18
April, 200X
(19.14)
19.14
Note receivable collected
by bank 4/30/9X
(18180.00)
(18180.00)
NSF check of customer L. G
Waite, charged back by
bank 3/31/9X, redeposited
and cleared 4/3/9X
418.19
(418.19)
Per Books
59353.23
45689.98
76148.98
28894.23
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.