Chapter 6 Assignment

1. Bank Reconciliation Statement Preparation 16 Points

Based on the following information prepare the bank reconciliation for Abco Corp.

From Bank Statement: From Books:

Balance at May 31	$11,200		Balance per company books	$8,665
Note and interest collected by bank	$3,300		Deposit in transit	$1,200
NSF check	$400		Outstanding checks at 5/31	$850
Service charge for April	$75		Error in recording check #100	$90
Interest earned	$150

From the company records the following is noted:

Check #100 written by Abco- correct amount was $500, but was recorded on the books as $410. The check was properly recorded by the bank.

Bank Reconciliation

Balance per bank statement

Add:

Deduct:

Adjusted bank balance

Balance per books

Add:

Deduct

Adjusted book balance

2. Identifying Cash and Cash Equivalents 9 Points

Identify each of the following with the letter Y if you think that Yes each item is accounted for as cash or a cash equivalent, or N if you think that No each item is not accounted for as cash or a cash equivalent.

___A. Undeposited checks received from customers.

___B. A one year U. S. Treasury bill

___C. Postage stamps

___D. Petty Cash

___E. Investments in stock certificates to be sold in 3 months

___F. Currency and coin in a cash register drawer

___G. Commercial paper maturing in 60 days

___H. Cashiers check

___I. IBM bonds to be sold in 1 mon