Oscar's Red Carpet Store maintains a checking account with Academy Bank. Oscar's sells carpet each day but makes bank deposits only once per week. The following provides information from the company's cash ledger for the month ending February 28, 2021. Date Amount No. Date Amount $ 2,200 Checks: 1,800 2,700 3,600 1,100 $ 11,400 $ 4,200 500 2,000 1,700 300 Deposits: 2/4 2/11 2/18 2/25 2/26–2/28 321 322 323 324 325 2/2 2/8 2/12 2/19 2/27 Cash receipts: 326 2/28 800 327 2/28 1,400 Balance on February 1 $ 6,300 $10,900 Receipts Disbursements 11,400 (10,900) $ 6,800 Balance on February 28 Information from February's bank statement and company records reveals the following additional information: a. The ending cash balance recorded in the bank statement is $10,350. b. Cash receipts of $1,100 from 2/26–2/28 are outstanding. c. Checks 325 and 327 are outstanding. d. The deposit on 2/11 includes a customer's check for $300 that did not clear the bank (NSF check). e. Check 323 was written for $2,800 for advertising in February. The bank properly recorded the check for this amount. f. An automatic withdrawal for Oscar's February rent was made on February 4 for $1,200. g. Oscar's checking account earns interest based on the average daily balance. The amount of interest earned for February is $150. h. In January, one of Oscar's suppliers, Titanic Fabrics, borrowed $5,000 from Oscar. On February 24, Titanic paid $5,200 ($5,000 borrowed amount plus $200 interest) directly to Academy Bank in payment for January's borrowing. i. Academy Bank charged service fees of $100 to Oscar's for the month.
Oscar's Red Carpet Store maintains a checking account with Academy Bank. Oscar's sells carpet each day but makes bank deposits only once per week. The following provides information from the company's cash ledger for the month ending February 28, 2021. Date Amount No. Date Amount $ 2,200 Checks: 1,800 2,700 3,600 1,100 $ 11,400 $ 4,200 500 2,000 1,700 300 Deposits: 2/4 2/11 2/18 2/25 2/26–2/28 321 322 323 324 325 2/2 2/8 2/12 2/19 2/27 Cash receipts: 326 2/28 800 327 2/28 1,400 Balance on February 1 $ 6,300 $10,900 Receipts Disbursements 11,400 (10,900) $ 6,800 Balance on February 28 Information from February's bank statement and company records reveals the following additional information: a. The ending cash balance recorded in the bank statement is $10,350. b. Cash receipts of $1,100 from 2/26–2/28 are outstanding. c. Checks 325 and 327 are outstanding. d. The deposit on 2/11 includes a customer's check for $300 that did not clear the bank (NSF check). e. Check 323 was written for $2,800 for advertising in February. The bank properly recorded the check for this amount. f. An automatic withdrawal for Oscar's February rent was made on February 4 for $1,200. g. Oscar's checking account earns interest based on the average daily balance. The amount of interest earned for February is $150. h. In January, one of Oscar's suppliers, Titanic Fabrics, borrowed $5,000 from Oscar. On February 24, Titanic paid $5,200 ($5,000 borrowed amount plus $200 interest) directly to Academy Bank in payment for January's borrowing. i. Academy Bank charged service fees of $100 to Oscar's for the month.
College Accounting (Book Only): A Career Approach
13th Edition
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:Scott, Cathy J.
Chapter6: Bank Accounts, Cash Funds, And Internal Controls
Section: Chapter Questions
Problem 5E
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Transcribed Image Text:Oscar's Red Carpet Store maintains a checking account with Academy Bank. Oscar's sells carpet each day but makes
bank deposits only once per week. The following provides information from the company's cash ledger for the month
ending February 28, 2021.
Date
Amount
No.
Date
Amount
$ 2,200 Checks:
1,800
2,700
3,600
1,100
$ 11,400
$ 4,200
500
321
322
323
324
325
Deposits:
2/4
2/11
2/18
2/25
2/26-2/28
2/2
2/8
2/12
2/19
2/27
2,000
1,700
300
Cash receipts:
326
2/28
800
1,400
$10,900
327
2/28
Balance on February 1
$ 6,300
Receipts
Disbursements
11,400
(10,900)
$ 6,800
Balance on February 28
Information from February's bank statement and company records reveals the following additional information:
a. The ending cash balance recorded in the bank statement is $10,350.
b. Cash receipts of $1,100 from 2/26-2/28 are outstanding.
c. Checks 325 and 327 are outstanding.
d. The deposit on 2/11 includes a customer's check for $300 that did not clear the bank (NSF check).
e. Check 323 was written for $2,800 for advertising in February. The bank properly recorded the check for this amount.
f. An automatic withdrawal for Oscar's February rent was made on February 4 for $1,200.
g. Oscar's checking account earns interest based on the average daily balance. The amount of interest earned for
February is $150.
h. In January, one of Oscar's suppliers, Titanic Fabrics, borrowed $5,000 from Oscar. On February 24, Titanic paid $5,200
($5,000 borrowed amount plus $200 interest) directly to Academy Bank in payment for January's borrowing.
i. Academy Bank charged service fees of $100 to Oscar's for the month.
Transcribed Image Text:Required:
1. Prepare a bank reconciliation for Oscar's checking account on February 28, 2021. (Amounts to be deducted should be indicated
with a minus sign. Total entries to the same account together when entering in the bank reconciliation.)
OSCAR'S RED CARPET STORE
Bank Reconciliation
February 28, 2021
Bank's Cash Balance
Company's Cash Balance
Per bank statement
Per general ledger
Bank balance
per
reconciliation
Company balance per reconciliation
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