Mod 4 HW Acoounting

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PART II: APPLICATION

Directions: Please answer each of the following questions. Show your work as necessary.

1. The following bank reconciliation contains several errors.

Bank Reconciliation
July 31, 20--

Bank Statement Balance		$ 9,057.00
Add: Note collected by bank		1,200.00
		$10,257.00
Deduct: Outstanding checks	$596.00
Error in recording Ck. No. 462 (recorded
check for $546 rather than $456)	90.00	686.00
Adjusted Bank Statement Balance		$ 9,571.00

Ledger Balance of Cash		$ 8,366.00
Add: NSF check from customer	$ 60.00
Deposit in transit	941.00	1,001.00
		$ 9,367.00
Deduct: Bank service and collection charges		14.00
Adjusted Ledger Balance of Cash		$ 9,353.00

Instructions:

Prepare a corrected bank reconciliation.

Bank Reconciliation
July 31, 20--

Bank Statement Balance
Add: Deposit in transit

Deduct: Outstanding checks
Adjusted Bank Statement Balance

Ledger Balance of Cash
Add: Note collected from customer

Deduct: Bank service and collection charges
Error in recording Ck. No. 462 (recorded
check for $546 rather than $456)
NSF check from customer
Adjusted Ledger Balance of Cash

2. Capable Cleaners deposits all receipts in the bank each evening and makes all payments by check. On March 31 its ledger balance of cash is $983.40. The bank statement balance of cash as of March 31 is $1,176.53. You are given the following information with which to reconcile the bank statement:

a.	A bank debit memo for service charges, $5.
b.	A deposit of $198.50 was placed in the night depository on March 31 and did not appear on the bank statement.
c.	The reconciliation for February, the previous month, showed two checks outstanding on February 28: Ck. No. 332 for $18 and Ck. No. 333 for $138.60. Ck. No. 333 was returned with the March statement; however, Ck. No. 332 was not returned.
d.	A bank debit memo for a $4.17 NSF check written by L. Long.
e.	Checks no. 352 for $141.15, no. 355 for $17.50, and no. 356 for $215.15 were written during March but were not returned by the bank.
f.	The canceled checks were compared with the entries in the check register, and it was observed that Ck. No. 348 for $56 was written correctly, payable to Glyn Company, a creditor, but was recorded in the checkbook as $65.

Instructions:

1.	Prepare a bank reconciliation as of March 31, assuming that the debit and credit memos have not been recorded.
2.	Record the necessary entries in general journal form using page 41.

1.)

Capable Cleaners
Bank Reconciliation
March 31, 20—

Bank Statement Balance
Add: Deposit in transit

Deduct: Outstanding checks
No. 332
No. 352
No. 355
No. 356
Adjusted Bank Statement Balance

Ledger Balance of Cash
Add: Error in recording Ck. No. 348 payable to
Glyn Company (recorded check for $9 too
much)

Deduct: Bank service and collection charges
NSF check from L. Long
Adjusted Ledger Balance of Cash

2.)

GENERAL JOURNAL					PAGE		41
Date		Description	Post. Ref.	Debit		Credit
20--		Adjusting Entries
Mar.	31	Cash
		Accounts Payable
		Error in recording Ck. No. 348
		payable to Glyn Company.

	31	Miscellaneous Expense
		Cash
		Service charge and collection
		charge levied by the bank.

	31	Accounts Receivable
		Cash
		NSF check received from L. Long.

3. Argee Co. maintains a Cash Short and Over account. During May, Argee Co. had the following selected transactions:

May 1	Established a Change Fund for $100.00.
10	Recorded cash income from services: cash register tape, $1,459.98; cash count, $1,557.60.
15	Established a Petty Cash Fund for $100.00.
31	Received a debit memo for $18.86 from the bank for an NSF check signed by B. Webb, a customer.
31	From the bank reconciliation, it was noted that a $63.37 check issued to Landro Company, a creditor, was previously recorded as $36.73.
31	Recorded cash income from services: cash register tape, $1,912.07; cash count, $2,012.65.
31	Issued a check to reimburse the Petty Cash Fund, $61.17. The remaining cash in the fund is $38.83. From the petty cash vouchers, payments were as follows: S. Argee, Drawing, $35.50; Supplies Expense, $19.40; Miscellaneous Expense, $6.27.

Instructions:

Record the transactions in general journal form on page 18.

4. On June 1 of this year, Estes and Company established a Petty Cash Fund. The following petty cash transactions took place during the month, and the fund has $165.00 remaining at June 30.

June	1	Cashed check to establish Petty Cash Fund for $250.
	3	Paid for mailing packages, $23.25, Voucher 1.
	8	Bought memo pads and post-it-notes, $10.50, Voucher 2.
	14	J. Estes, the owner, withdrew $20.00 for personal use, Voucher 3.
	19	Paid $15.00 for window cleaning, Voucher 4.
	22	Paid $8.75 for package delivery, Voucher 5.
	28	Paid $5.50 for parking fee, Voucher 6.
	30	Issued check to reimburse Petty Cash Fund.

Instructions:

1. Journalize the entry to establish the Petty Cash Fund in general journal using page 9.

2. Record the disbursements of petty cash in the petty cash payments record.

3. Journalize the summarizing entry to reimburse the Petty Cash Fund.

1-3.)

GENERAL JOURNAL					PAGE		9
Date		Description	Post. Ref.	Debit		Credit
20--		Adjusting Entries
June	1	Petty Cash Fund
		Cash
		establish petty cash fund

	30	Office Supplies
		Maintenance Expense
		Miscellaneous Expense
		J. Estes, Drawing
		Cash Short & Over
		Cash
		reimburse fund

2.)

Date	Vou. No.	Explanation	Payments	Office Supplies	Maintenance Exp.	Misc Exp.	Acct.	Other Acct. Amount
3	1
8	2
14	3
19	4
22	5
28	6
30