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Financial & Managerial Accounting
Found in: Page 305
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

BTN 6-1 Refer to Apple’s financial statements in Appendix A to answer the following.

2. For fiscal years ended September 26, 2015, and September 27, 2014, use the information in the statement of cash flows to determine the percent change (rounded to one decimal) between the beginning and ending year amounts of cash and cash equivalents.

Percentage change in 2014 is 29.5% decrease and in 2015 is 85.6% increase.

See the step by step solution

Step by Step Solution

Step-by-Step SolutionStep 1: Meaning of Cash and Cash Equivalents

Cash and cash equivalents are a part of the company's balance sheet, and it includes the cash and those assets that can be easily convertible into cash.

Step 2: The statement of cash flows for year ended September 26, 2015 ($ million):

Cash and equivalents, beginning-year (A)

Cash and equivalents, year-end (B)

Percent change

(B-A)/A

$ 835,546

$1,550,861

85.6% increase

Step 3: The statement of cash flows for year ended September 27, 2014 ($ million):

Cash and equivalents, beginning-year (A)

Cash and equivalents, year-end (B)

Percent change

(B-A)/A

$ 1,184,398

$ 835,546

29.5% decrease

Most popular questions for Business-studies Textbooks

Chavez Company most recently reconciled its bank statement and book balances of cash on August 31 and it reported two checks outstanding, No. 5888 for $1,028.05 and No. 5893 for $494.25. The following information is available for its September 30, 2017, reconciliation.

From the September 30 Bank Statement 16,800.45 9,620.05 11,272.85 18,453.25 PREVIOUS BALANCE TOTAL CHECKS AND DEBITS TOTAL DEPOSITS AND CREDITS CURRENT BALANCE Date 09/03 09/04 09/07 09/20 09/17 09/22 09/22 09/28 09/29 CHECKS AND DEBITS DEPOSITS AND CREDITS 5888 1,028.05 09/05 1,103.75 No. Amount Date Amount 5902 719.90 09/12 2,226.90 5901 1,824.25 09/21 4,093.00 5905 937.00 09/30 12.50 IN 09/25 2,351.70 5903 399.10 09/30 1,485.00 CM 5904 5907 5909 2,090.00 213.85 1,807.65

From Chavez Company’s Accounting Records Cash Acct. No. 101 Date Explanation PR Debit Credit Balance Aug. 31 Balance 15,278.15 Sep. 30 Total receipts R12 11,458.10 26,736.25 30 Total disbursements D23 9,332.05 17,404.20 Cash Receipts Deposited Cash Date Debit Sep. 5 1,103.75 12 2,226.90 21 4,093.00 25 2,351.70 30 1,682.75 11,458.10 Cash Disbursements Check Cash No. Credit 5901 1,824.25 5902 719.90 5903 399.10 5904 2,060.00 5905 937.00 5906 982.30 5907 213.85 5908 388.00 5909 1,807.65 9,332.05

Additional Information

Check No. 5904 is correctly drawn for $2,090 to pay for computer equipment; however, the recordkeeper misread the amount and entered it in the accounting records with a debit to Computer Equipment and a credit to Cash of $2,060. The NSF check shown in the statement was originally received from a customer, S. Nilson, in payment of her account. Its return has not yet been recorded by the company. The credit memorandum (CM) is from the collection of a $1,500 note for Chavez Company by the bank. The bank deducted a $15 collection expense. The collection and fee are not yet recorded.

Required

2. Prepare the journal entries (in dollars and cents) to adjust the book balance of cash to the reconciled balance.

The following information is available to reconcile Severino Co.’s book balance of cash with its bank statement cash balance as of December 31, 2017.

a. The December 31 cash balance according to the accounting records is $32,878.30, and the bank statement cash balance for that date is $46,822.40.

b. Check No. 1273 for $4,589.30 and Check No. 1282 for $400, both written and entered in the accounting records in December, are not among the canceled checks. Two checks, No. 1231 for $2,289 and

No. 1242 for $410.40, were outstanding on the most recent November 30 reconciliation. Check No. 1231 is listed with the December canceled checks, but Check No. 1242 is not.

c. When the December checks are compared with entries in the accounting records, it is found that Check No. 1267 had been correctly drawn for $3,456 to pay for office supplies but was erroneously entered in the accounting records as $3,465.

d. Two memoranda are enclosed with the statement and are unrecorded at the time of the reconciliation. The first is for a $762.50 charge that dealt with an NSF check for $745 received from a customer, Titus Industries, in payment of its account. The bank assessed a $17.50 fee for processing it. The second is $99 in miscellaneous expenses for check printing.

e. The bank statement shows that the bank collected $19,000 cash on a note receivable for the company, deducted a $20 collection expense, and credited the balance to the company’s Cash account. Severino did not record this transaction before receiving the statement.

f. Severino’s December 31 daily cash receipts of $9,583.10 were placed in the bank’s night depository on that date but do not appear on the December 31 bank statement.

Required

2. Prepare the journal entries (in dollars and cents) necessary to bring the company’s book balance of cash into conformity with the reconciled cash balance as of December 31, 2017.

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