Shamara Systems most recently reconciled its bank balance on April 30 and reported two checks outstanding at that time, No. 1771 for $781 and No. 1780 for $1,425.90. The following information is available for its May 31, 2017, reconciliation
From the May 31 Bank Statement PREVIOUS BALANCE TOTAL CHECKS AND DEBITS TOTAL DEPOSITS AND CREDITS CURRENT BALANCE CHECKS AND DEBITS DEPOSITS AND CREDITS 18,290.70 Date 05/01 1771 05/04 No. Amount Date Amount 13,094.80 16,566.80 21,762.70 05/02 1783 05/14 05/04 1782 05/22 1784 05/18 05/26 05/11 05/25 05/25 1787 05/26 1785 05/29 1788 05/31 2,438.00 2,898.00 1,801.80 2,079.00 7,350.00 CM 781.00 382.50 1,285.50 431.80 NSF 8,032.50 63.90 654.00 14.00 SC
From Shamara Systems’s Accounting Records Cash Receipts Deposited Cash Date Debit May 4 2,438.00 14 2,898.00 22 1,801.80 26 2,079.00 31 2,727.30 11,944.10 Cash Disbursements Check Cash No. Credit 1782 1,285.50 1783 382.50 1784 1,449.60 1785 63.90 1786 353.10 1787 8,032.50 1788 644.00 1789 639.50 12,850.60 Cash Acct. No. 101 Date Explanation PR Debit Credit Balance Apr. 30 Balance 16,083.80 May 31 Total receipts R7 11,944.10 28,027.90 31 Total disbursements D8 12,850.60 15,177.30
Check No. 1788 is correctly drawn for $654 to pay for May utilities; however, the recordkeeper misread the amount and entered it in the accounting records with a debit to Utilities Expense and a credit to Cash for $644. The bank paid and deducted the correct amount. The NSF check shown in the statement was originally received from a customer, W. Sox, in payment of her account. The company has not yet recorded its return. The credit memorandum (CM) is from a $7,400 note that the bank collected for the company. The bank deducted a $50 collection expense and deposited the remainder in the company’s account. The collection and expense have not yet been recorded.
1. Prepare the May 31, 2017, bank reconciliation for Shamara Systems.
The Adjusted Bank statement balance and adjusted book balance are $22,071.50
Bank Reconciliation- A bank reconciliation is an interaction by which the bank account balance in an entity's record books is reconciled to the balance detailed by the financial institution in the latest bank statement.
Bank Reconciliation Statement
Bank statement balance
Deposit of May 31
Proceeds of note less
Checks No. 1780 $1,425.90
NSF check $431.80
Service charge 14.00
Error (Ck 1788) 10.00
Adjusted bank balance
Adjusted book balance
For each of the following items a through g, indicate whether its amount (1) affects the bank or book side of a bank reconciliation, (2) represents an addition or a subtraction in a bank reconciliation, and (3) requires an adjusting journal entry.
Bank or Book Side Add or Subtract Adj. Entry or Not
d. Outstanding checks. . . . . . . . . . . . . . .
Palmona Co. establishes a $200 petty cash fund on January 1. On January 8, the fund shows $38 in cash along with receipts for the following expenditures: postage, $74; transportation-in, $29; delivery expenses, $16; and miscellaneous expenses, $43. Palmona uses the perpetual system in accounting for merchandise inventory. Prepare journal entries to
(1) establish the fund on January 1(2) reimburse it on January 8 (3) both reimburse the fund and increase it to $450 on January 8, assuming no entry in part 2. (Hint: Make two separate entries for part 3.)
SP 6 Santana Rey receives the March bank statement for Business Solutions on April 11, 2018. The March 31 bank statement shows an ending cash balance of $67,566. A comparison of the bank statement with the general ledger Cash account, No. 101, reveals the following.
a. S. Rey notices that the bank erroneously cleared a $500 check against her account in March that she did not issue. The check documentation included with the bank statement shows that this check was actually issued by a company named Business Systems.
b. On March 25, the bank lists a $50 charge for the safety deposit box expense that Business Solutions agreed to rent from the bank beginning March 25.
c. On March 26, the bank lists a $102 charge for printed checks that Business Solutions ordered from the bank.
d. On March 31, the bank lists $33 interest earned on Business Solutions’s checking account for the month of March.
e. S. Rey notices that the check she issued for $128 on March 31, 2018, has not yet cleared the bank.
f. S. Rey verifies that all deposits made in March do appear on the March bank statement.
g. The general ledger Cash account, No. 101, shows an ending cash balance per books of $68,057 as of March 31 (prior to any reconciliation).
1. Prepare a bank reconciliation for Business Solutions for the month ended March 31, 2018.
Visit the Association of Certified Fraud Examiners website and open the “2016 Report to the Nation” (s3-us-west2.amazonaws.com/acfepublic/2016-report-to-the-nations.pdf). Read the two-page Executive Summary and fill in the following blanks.
1. The median loss for all cases in our study was, with of cases causing losses of $1 million or more.
94% of StudySmarter users get better grades.Sign up for free