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Financial & Managerial Accounting
Found in: Page 306
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

Nolan Company deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on June 30, 2017, its Cash account shows a $22,352 debit balance. Nolan’s June 30 bank statement shows $21,332 on deposit in the bank. Prepare a bank reconciliation for the company using the following information.

d. June 30 cash receipts of $4,724 were placed in the bank’s night depository after banking hours and were not recorded on the June 30 bank statement.

Answer

Add $4,724 as deposit of June 30 in bank statement balance.

See the step by step solution

Step by Step Solution

Step-by-Step SolutionStep 1: Meaning of Bank Statement

A bank statement is a statement (otherwise called an account statement) commonly sent by the bank to the account holder consistently, summing up every one of the transactions of a record during the month.

Step 2: Bank Reconciliation Statement-

Bank statement balance:

Add:

Deposit of June 30

$4,724

Most popular questions for Business-studies Textbooks

Moya Co. establishes a petty cash fund for payments of small amounts. The following transactions involving the petty cash fund occurred in January (the last month of the company’s fiscal year).Jan. 3 A company check for $150 is written and made payable to the petty cashier to establish the petty cash fund.14 A company check is written to replenish the fund for the following expenditures made since January 3.

a. Purchased office supplies for $14.29 that are immediately used up.

b. Paid $19.60 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Moya uses the perpetual system to account for inventory.

c. Paid $38.57 to All-Tech for repairs expense to a computer.

d. Paid $12.82 for items classified as miscellaneous expenses.

e. Counted $62.28 remaining in the petty cashbox.

15 Prepared a company check for $50 to increase the fund to $200.

31 The petty cashier reports that $17.35 remains in the fund. A company check is written to replenish the fund for the following expenditures made since January 14.

f. Paid $50 to The Smart Shopper in advertising expense for January’s newsletter.

g. Paid $48.19 for postage expenses.

h. Paid $78 to Smooth Delivery for delivery expense of merchandise, terms FOB destination.

31 The company decides that the January 15 increase in the fund was too little. It increases the fund by another $50, leaving a total of $250.

Required

1. Prepare journal entries (in dollars and cents) to establish the fund on January 3, to replenish it on January 14 and January 31, and to reflect any increase or decrease in the fund balance on January 15 and 31.

Analysis Component

2. Explain how the company’s financial statements are affected if the petty cash fund is not replenished and no entry is made on January 31

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