The cash balance per the books of Widget Company is $91,178 on November 30, 2021. The bank statement for Widget shows a cash balance of $98,008 on November 30. The following additional items were noted:

1. A deposit of $18,600 made by Widget on November 30 was not recorded by the bank until December 2.
2. Outstanding cheques (cheques written by Widget but not yet cleared by the bank) at Oct. 31 were:

#1012 for $10,500

#1044 for $5,100

#1078 for $3,500

Outstanding cheques (cheques written by Widget but not yet cleared by the bank) at Nov. 30 are:

#1044 for $5,100

#1110 for $15,000

#1168 for $9,200

#1198 for $ 800

3. A review of the bank statement revealed that Widget Company received electronic payments from customers on account of $925 in November. The bank has also credited Widget’s account with $17 of interest revenue on November 30. Widget had no previous notice of these amounts.
4. The bank statement showed an NSF charge on November 30 of $3,420. A cheque for $3,400 from a customer, Bodington Consulting Limited, which had been deposited in November, was returned by the bank on November 30 marked "NSF." The bank charged Widget Company $20 for the returned cheque.
5. Included in the canceled cheques returned with the November bank statement was a cheque for $2,200 written by Newcastle Inc., which had been incorrectly debited to Widget’s account by the bank.
6. A Widget cheque (#457) for $629 dated November 22 cleared the bank on November 24. This cheque, which was a payment on account to a supplier, was incorrectly journalized by Widget for $692.

The recurring bank service charges for November amounted to $55.

Instructions

1. Prepare a bank reconciliation for Widget Company on November 30, 2021.
2. Prepare journal entries to update the cash balance per book.
3. What amount will show on the November 30, 2021 balance sheet for the cash account?
4. The company will prepare entries to record some of the items found in the above reconciliation (see part B). Describe any other follow-up actions required regarding the other reconciling items in Widget’s bank reconciliation.
5. In addition to the bank chequing account that you just reconciled, Widget Company has the following items: $4,600 in its bank savings account; a $150 petty cash fund; $3,860 of postdated cheques from customers; $12,700 in highly liquid short-term investments with maturity dates of less than 90 days; $26,500 of short-term investments with maturity dates of 100 to 365 days; and $4,800 in a bank account restricted for use in repayment of customer deposits on goods and services. How will each of these items be reported on the balance sheet?

Answer rating: 100% (QA)

Answer Solution Widget Company Answer A Bank reconciliation statement Amount Amount Balance as per b... View the full answer