Question 1 The cash account for Remedial Medical Co. at April 30, 2014, indicated a balance...
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Question 1 The cash account for Remedial Medical Co. at April 30, 2014, indicated a balance of $18,885. The bank statement indicated a balance of $23,775 on April 30, 2014. Comparing the bank statement and the accompanying canceled cheques and memos with the records revealed the following reconciling items: i) Cheques outstanding totaled $7,840 ii) A deposit of $3,580, representing receipts on April 30, had been made too late to appear on the bank statement. iii) The bank collected $3,780 on a note left for collection. The face of the note was $3,600. iv) A cheque for $770 returned with the statement had been incorrectly recorded by Remedial Medical Co. as $700. The cheque was for the payment of an obligation to Copelin Co. for a purchase on account. v) A cheque drawn for $330 had been erroneously charged by the bank as $3,300. vi) Bank service charges for April amounted to $110. Required: a) Prepare a bank reconciliation statement for Remedial Medical Co., at April 30. b) Journalize the necessary entries. Assume that the accounts have not been closed. c) State the amount of cash that should be included in the balance sheet at April 30. Question 2 The cash transactions and cash balances of Banner Inc., for July were as follows: i) The ledger account for Cash showed a balance at July 31 of $125,568 ii) The July bank statement showed a closing balance of $114,828. iii) iv) v) vi) The cash received on July 31 amounted to $16,000. It was left at the bank in the night depository chute after banking hours on July 31 and therefore was not recorded by the bank on the July statement. Also included with the July bank statement was a debit memorandum from the bank for $50 representing service charges for July. A credit memorandum enclosed with the bank statement indicated that a non-interest bearing note receivable for $4,000 from Rene Manes, left with the bank for collection, had been collected and the proceeds credited to the account of Banner. Inc Comparison of the paid cheques returned by the bank with the entries in the accounting records revealed that cheque no. 821 for $519, issued July 15 in payment for office equipment, had been erroneously entered in Banner's records as $915. vii) Examination of the paid cheques also revealed that three cheques, all issued in July, had not yet been paid by the bank: no.811 for $314; no.814 for $625; no. 823 for $175. Required: a) Prepare a bank reconciliation statement for Banner. Inc., at July 31. b) Prepare the journal entries necessary to bring the company's book balance of cash in conformity with the reconciled cash balance as of July 31. Assume that the accounts have not been closed. c) State the amount of cash that should be included in the balance sheet at July 31. d) Explain why the balance as per the bank statement is often larger than the balance shown in its accounting records. Question 1 The cash account for Remedial Medical Co. at April 30, 2014, indicated a balance of $18,885. The bank statement indicated a balance of $23,775 on April 30, 2014. Comparing the bank statement and the accompanying canceled cheques and memos with the records revealed the following reconciling items: i) Cheques outstanding totaled $7,840 ii) A deposit of $3,580, representing receipts on April 30, had been made too late to appear on the bank statement. iii) The bank collected $3,780 on a note left for collection. The face of the note was $3,600. iv) A cheque for $770 returned with the statement had been incorrectly recorded by Remedial Medical Co. as $700. The cheque was for the payment of an obligation to Copelin Co. for a purchase on account. v) A cheque drawn for $330 had been erroneously charged by the bank as $3,300. vi) Bank service charges for April amounted to $110. Required: a) Prepare a bank reconciliation statement for Remedial Medical Co., at April 30. b) Journalize the necessary entries. Assume that the accounts have not been closed. c) State the amount of cash that should be included in the balance sheet at April 30. Question 2 The cash transactions and cash balances of Banner Inc., for July were as follows: i) The ledger account for Cash showed a balance at July 31 of $125,568 ii) The July bank statement showed a closing balance of $114,828. iii) iv) v) vi) The cash received on July 31 amounted to $16,000. It was left at the bank in the night depository chute after banking hours on July 31 and therefore was not recorded by the bank on the July statement. Also included with the July bank statement was a debit memorandum from the bank for $50 representing service charges for July. A credit memorandum enclosed with the bank statement indicated that a non-interest bearing note receivable for $4,000 from Rene Manes, left with the bank for collection, had been collected and the proceeds credited to the account of Banner. Inc Comparison of the paid cheques returned by the bank with the entries in the accounting records revealed that cheque no. 821 for $519, issued July 15 in payment for office equipment, had been erroneously entered in Banner's records as $915. vii) Examination of the paid cheques also revealed that three cheques, all issued in July, had not yet been paid by the bank: no.811 for $314; no.814 for $625; no. 823 for $175. Required: a) Prepare a bank reconciliation statement for Banner. Inc., at July 31. b) Prepare the journal entries necessary to bring the company's book balance of cash in conformity with the reconciled cash balance as of July 31. Assume that the accounts have not been closed. c) State the amount of cash that should be included in the balance sheet at July 31. d) Explain why the balance as per the bank statement is often larger than the balance shown in its accounting records.
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Question 1a Bank Reconciliation Statement of Remedial Medical Co for the month of April 30 2014 Particulars Dr Cr Balance as per cash book Rs 18885 Ad... View the full answer
Related Book For
Corporate Financial Accounting
ISBN: 978-1133952411
12th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac
Posted Date:
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