The staff accountant has completed the December 3 1 , Year 1 , cash reconciliation for Giant
Fantastic news! We've Found the answer you've been seeking!
Question:
The staff accountant has completed the December Year cash reconciliation for Giant Corporation. The staff accountant was unable to get the reconciliation to balance and has asked you to review his work and help him find the errors. None of the other charges and credits in the bank statement has been recorded on the books. Also, no checks are outstanding that were issued before December Year
Compile a list of comments to correct the reconciliation. To prepare the list, click on the underlined text below and select the needed correction, if any, from the list provided. If the underlined text is already correct in the context of the document, select Original Text from the list. If removal of the entire underlined text is the best revision to the document as a whole, select Delete Text from the list when that option is available.
Giant Corp.
Cash Reconciliation
December Year
Description Amount Description Amount
Balance per company books, December $ Balance per bank statement, December $
Additions: Additions:
Customer check NSF Deposit in transit
Deductions: Deductions:
Customer check NSF Outstanding checks
Outstanding checks
Bank collection fee Bank collection fee
Correct cash balance $ Adjusted bank balance $
Review of Bank Reconciliation
The correct adjustments to the book and cash balance in the reconciliation are described below.
Addition to the balance per company books should be:
Customer check NSF of $
Deductions from balance per company books should be:
Customer check NSF of $
Outstanding checks of $
Bank collection fee of $
Addition to balance per bank statement should be:
Deposit in transit of $
Deductions from balance per bank statement should be:
Outstanding checks of $
Bank collection fee of $
Additional comment:
The company has a compensating balance arrangement with the bank. The compensating balance agreement results in a need to reduce current cash by $
Exhibits are below:
Bank ABC
Statement Date: through Year
BANK STATEMENT
Giant Corp.
Wilson Blvd
Atlanta, Georgia
CHECKING SUMMARY
Previous statement balance on November Year
Deposits
Withdrawals & other debits
Service charges
Balance December Year
CHECKS AND OTHER DEBITS
Check Date Paid Amount Check Date Paid Amount
Dec Dec
Dec Dec
Dec Dec
Dec Dec
Dec Dec
Dec Dec
Dec Dec
Dec Dec
Dec Dec
Dec Dec
Dec Dec
Dec Dec
Dec Dec
Dec Dec
Dec Dec
Dec Dec
NSF returned check
NSF check charge
Note collection fee
DEPOSITS AND OTHER CREDITS
Date Posted Amount
Customer Deposit Dec
Customer Deposit Dec
Customer Deposit Dec
Collection of Note to Giant from Medium Corp. Dec
CASH PAYMENTS JOURNAL
ACCOUNTS
CK POST. PAYABLE CASH
DATE Vendor NO REF. DEBIT CREDIT
Dec Goble & Whitman LLP
Dec Johnson Supply Company
Dec Able Delivery Service
Dec Great Office Supply
Dec Wilson Supply Company
Bank ABC
Wrd St
Atlanta, GA
January Year
Giant Corp.
Wilson Blvd
Atlanta, GA
Dear Linda Wilson:
We are pleased to advise you that we have established for your company a $ line of credit available for promissory note borrowings that will be due on demand, or if no demand is earlier made, then days after the date funded. This credit facility will be reviewed periodically and may be canceled by you or us without cause at any time. The rate of interest on promissory note borrowings will be six percent over the rate we announce from time to time as our "Prime Rate," the interest rate applicable to such borrowings to change concurrently with any change in such Prime Rate.
Related Book For
Intermediate Accounting Volume 2
ISBN: 9781119497042
12th Canadian Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
Posted Date: