The following information was obtained from in an audit of cash of the Buttfuski Alcohol Distribution Company
Question:
The following information was obtained from in an audit of cash of the Buttfuski Alcohol Distribution Company as of 12.31.15
1. Bank reconciliation at 11.30.15:
Balance per bank statement $19,400
Deposits in transit $1,100
Outstanding checks:
#2540 $140
#1501 $750
#1503 $580
#1504 $800
#1505 $30
Balance per books $18,200
2. Summary of the bank statement at 12.31.15
Balance brought forward $19,400
Deposits $148,700
Charges $132,500
Balance 12.31.15 $35,600
3. Summary of the general ledger at 12.31.15
Balance brought forward $18,200
Receipts $149,690
Disbursements $124,885
Balance $43,005
4. Buttfuski discounted its own 60 day note for $9,000 with Keybank on 12.1.15, the discount rate was 6%. The Canisius grad recorded the proceeds as a cash receipt for the face amount of the note.
5. The accountant records? customers dishonored checks as a reduction of cash receipts. When the dishonored checks are redeposited, it is recorded as a regular cash receipt. 2 NSF checks for $180 and $220 were returned by Keybank during December and both were redeposited
6. December bank charges were $20. Also a $10 was made in December for a foreign draft in November. These charges have not been recorded
7. Check #2540 listed in the November outstanding checks was drawn is 2014. The payee cannot be located and the president agrees with your suggestion that the check be written back into the account.
8. Outstanding checks at 12.31.15 amounted to $4,000 excluding checks # 2540 and #1504
9. The cutoff bank statement disclosed that the bank had recorded a deposit of $2,400 on 1.2.16. The accountant had recorded this deposit on 12.31.15 and mailed it to Keybank
10. Some special checks need mention:
****Prepare a four column proof of cash ****
Mathematical Statistics with Applications in R
ISBN: 978-0124171138
2nd edition
Authors: Chris P. Tsokos, K.M. Ramachandran