Financial Accounting
4th Edition
ISBN: 9781259307959
Author: J. David Spiceland, Wayne M Thomas, Don Herrmann
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 4, Problem 4.10E
Requirement – 1
To determine
To prepare: The
2.
To determine
To record: The necessary
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The Cash account of ReeseCorporation had a balance of $3,540 at October 31, 2018. Included were outstanding checkstotaling $1,800 and an October 31 deposit of $300 that did not appear on the bank statement.The bank statement, which came from Turnstone State Bank, listed an October 31 balance of$5,570. Included in the bank balance was an October 30 collection of $600 on account froma customer who pays the bank directly. The bank statement also showed a $30 service charge,$10 of interest revenue that Reese earned on its bank balance, and an NSF check for $50.Prepare a bank reconciliation to determine how much cash Reese actually had at October 31.
The Cash account of Reese Corporation had a balance of $3,540 at October 31, 2018. Included were outstanding checks
totaling $1,800 and an October 31 deposit of $300 that did not appear on the bank statement. The bank statement, which came
from Turnstone State Bank, listed an October 31 balance of $5,570. Included in the bank balance was an October 30 collection
of $600 on account from a customer who pays the bank directly. The bank statement also showed a $30 service charge, $10 of
interest revenue that Reese earned on its bank balance, and an NSF check for $50.
Read the requirement.
Prepare a bank reconciliation to determine how much cash Reese actually had at October 31. (Indlude the balances at October
31 in each of the addition subtotal calculations.)
Reese Corp.
Bank Reconcillation
October 31, 2018
Bank
Books
Balance, October 31
Balance, October 31
Add:
Add:
Subtotal
Subtotal
Less:
Less:
Adjusted bank balance
Adjusted book balance
Reese has cash of
at October 31.
The Cash account of
Reese
Corporation had a balance of
$3,540
at
October
31,
2018.
Included were outstanding checks totaling
$1,800
and an
October
31
deposit of
$300
that did not appear on the bank statement. The bank statement, which came from
Turnstone
State Bank, listed an
October
31
balance of
$5,570.
Included in the bank balance was an
October
30 collection of
$600
on account from a customer who pays the bank directly. The bank statement also showed a
$30
service charge,
$10
of interest revenue that
Reese
earned on its bank balance, and an NSF check for
$50.
Reese
Corporation's bank reconciliation follows.
Reese Corp.
Bank Reconciliation
October 31, 2018
Bank
Books
Balance, October 31
$5,570
Balance, October 31
$3,540
Add:
Add:
Deposit in transit
300
Bank collection
600
5,870
Interest revenue
10…
Chapter 4 Solutions
Financial Accounting
Ch. 4 - Prob. 1RQCh. 4 - Prob. 2RQCh. 4 - Prob. 3RQCh. 4 - Prob. 4RQCh. 4 - What is meant by the fraud triangle, and what can...Ch. 4 - Prob. 6RQCh. 4 - Prob. 7RQCh. 4 - Prob. 8RQCh. 4 - What is meant by separation of duties?Ch. 4 - Prob. 10RQ
Ch. 4 - Prob. 11RQCh. 4 - Prob. 12RQCh. 4 - Prob. 13RQCh. 4 - Prob. 14RQCh. 4 - Prob. 15RQCh. 4 - Prob. 16RQCh. 4 - Prob. 17RQCh. 4 - Prob. 18RQCh. 4 - Prob. 19RQCh. 4 - Prob. 20RQCh. 4 - Prob. 21RQCh. 4 - 22.What are two primary reasons that the companys...Ch. 4 - Prob. 23RQCh. 4 - Prob. 24RQCh. 4 - Prob. 25RQCh. 4 - Describe how management maintains control over...Ch. 4 - Prob. 27RQCh. 4 - Describe the operating, investing, and financing...Ch. 4 - Why is an analysis of the companys cash balance...Ch. 4 - We compared Regal Entertainment and Cinemark at...Ch. 4 - Prob. 4.1BECh. 4 - Match each of the following components of internal...Ch. 4 - Prob. 4.3BECh. 4 - Prob. 4.4BECh. 4 - During the year, the following sales transactions...Ch. 4 - Prob. 4.6BECh. 4 - Prob. 4.7BECh. 4 - Prob. 4.8BECh. 4 - Prob. 4.9BECh. 4 - Prob. 4.10BECh. 4 - Prob. 4.11BECh. 4 - Prob. 4.12BECh. 4 - Prob. 4.13BECh. 4 - Prob. 4.14BECh. 4 - Prob. 4.15BECh. 4 - On January 12, Ferrell Incorporated obtains a...Ch. 4 - Prob. 4.17BECh. 4 - For each company, calculate the ratio of cash to...Ch. 4 - Prob. 4.1ECh. 4 - Prob. 4.2ECh. 4 - Prob. 4.3ECh. 4 - Prob. 4.4ECh. 4 - Below are several amounts reported at the end of...Ch. 4 - Prob. 4.6ECh. 4 - Prob. 4.7ECh. 4 - Prob. 4.8ECh. 4 - Prob. 4.9ECh. 4 - Prob. 4.10ECh. 4 - Prob. 4.11ECh. 4 - Prob. 4.12ECh. 4 - Prob. 4.13ECh. 4 - Prob. 4.14ECh. 4 - Prob. 4.15ECh. 4 - Below are cash transactions for Goldman...Ch. 4 - Prob. 4.17ECh. 4 - Prob. 4.18ECh. 4 - Consider the following information: 1.Service...Ch. 4 - Prob. 4.20ECh. 4 - Prob. 4.1APCh. 4 - Prob. 4.2APCh. 4 - Prob. 4.3APCh. 4 - Prob. 4.4APCh. 4 - Prob. 4.5APCh. 4 - Prob. 4.1BPCh. 4 - Prob. 4.2BPCh. 4 - Prob. 4.3BPCh. 4 - Prob. 4.4BPCh. 4 - Prob. 4.5BPCh. 4 - An examination of the cash activities during the...Ch. 4 - Prob. 4.2APFACh. 4 - Prob. 4.3APFACh. 4 - Prob. 4.4APCACh. 4 - Prob. 4.5APECh. 4 - Prob. 4.7APWC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Complex Balance Sheet Presented below is the unaudited balance sheet as of December 31, 2019, prepared by Zeus Manufacturing Corporations bookkeeper. Your company has been engaged to perform an audit, during which you discover the following information: 1. Checks totaling 14,000 in payment of accounts payable were mailed on December 31, 2019, but were not recorded until 2020. Late in December 2019, the bank returned a customers 2,000 check marked NSF, but no entry was made. Cash includes 100,000 restricted for building purposes. 2. Included in accounts receivable is a 30,000 note due on December 31, 2022, from Zeuss president. 3. During 2019, Zeus purchased 500 shares of common stock of a major corporation that supplies Zeus with raw materials. Total cost of this stock was 51,300, and fair value on December 31, 2019, was 51,300. Zeus plans to hold these shares indefinitely. 4. Treasury stock was recorded at cost when Zeus purchased 200 of its own shares for 32 per share in May 2019. This amount is included in investments. 5. On December 31, 2019, Zeus borrowed 500,000 from a bank in exchange for a 10% note payable, manning December 31, 2024. Equal principal payments are due December 31 of each year beginning in 2020. This note is collateralized by a 250,000 tract of land acquired as a potential future building site, which is included in land. 6. The mortgage payable requires 50,000 principal payments, plus interest, at the end of each month. Payments were made on January 31 and February 28, 2020. The balance of this mortgage was due June 30, 2020. On March 1, 2020, prior to issuance of the audited financial statements, Zeus consummated a non-cancelable agreement with the lender to refinance this mortgage. The new terms require 100,000 annual principal payments, plus interest, on February 28 of each year, beginning in 2021. The final payment is due February 28, 2028. 7. The lawsuit liability will be paid in 2020. 8. Of the total deferred tax liability; 5,000 is considered a current liability. 9. The current income tax expense reported in Zeuss 2019 income statement was 61,200. 10. The company was authorized to issue 100,000 shares of 50 par value common stock.arrow_forwardOn August 31, 2021, the general ledger of The Dean Acting Academy shows a balance for cash of $7,744. Cash receipts yet to be deposited into the checking account total $3,138, and checks written by the academy but not yet processed by the bank total $1,225. The company's balance of cash does not reflect a bank service fee of $15 and interest earned on the checking account of $26. These amounts are included in the balance of cash of $5,842 reported by the bank as of the end of August. Required: 1. Prepare a bank reconciliation to calculate the correct ending balance of cash on August 31, 2021. (Amounts to be deducted should be indicated with a minus sign.) 2. Record the necessary entry(ies) to adjust the balance for cash. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Next Visit question map Question 3 of 8 Total3 of 8 Prevarrow_forwardOn August 31, 2021, the general ledger of The Dean Acting Academy shows a balance for cash of $7,944. Cash receipts yet to be deposited into the checking account total $3,338, and checks written by the academy but not yet processed by the bank total $1,425. The company’s balance of cash does not reflect a bank service fee of $35 and interest earned on the checking account of $46. These amounts are included in the balance of cash of $6,042 reported by the bank as of the end of August.Required:1. Prepare a bank reconciliation to calculate the correct ending balance of cash on August 31, 2021.2. Record the necessary entry(ies) to adjust the balance for cash.arrow_forward
- On August 31, 2019, the balance in the checkbook and the Cash account of the Dry Creek Bed and Breakfast was $12,316. The balance shown on the bank statement on the same date was $13,217. Notes The firm’s records indicate that a $1,490 deposit dated August 30 and a $705 deposit dated August 31 do not appear on the bank statement. A service charge of $7 and a debit memorandum of $340 covering an NSF check have not yet been entered in the firm’s records. (The check was issued by Art Corts, a credit customer.) The following checks were issued but have not yet been paid by the bank: Check 712, $ 114 Check 713, $ 129 Check 716, $ 242 Check 736, $ 581 Check 739, $ 82 Check 741, $ 124 A credit memorandum shows that the bank collected a $2,104 note receivable and interest of $67 for the firm. These amounts have not yet been entered in the firm’s records. Required: Prepare a bank reconciliation statement for the firm as of August 31. Record…arrow_forwardThe Cash account of Rettell Corporation had a balance of $3,570 at October 31, 2021. Included were outstanding checks totaling $1,800 and an October 31 deposit of $300 that did not appear on the bank statement. The bank statement, which came from Parway State Bank, listed an October 31 balance of $5,540. Included in the bank balance was an October 30 collection of $529 on account from a customer who pays the bank directly. The bank statement also showed a $34 service charge, $15 of interest revenue that Rettell earned on its bank balance, and an NSF check for $40. Prepare a bank reconciliation to determine how much cash Rettell actually had at October 31.arrow_forwardThe cash account for Kahn Inc. on November 30, 2018, indicated a balance of $5,699. The bank statement indicated a balance of $13,167 on November 30, 2018. The following reconciling items were discovered.Checks outstanding totaled $5,175. A deposit of $3,842, representing cash receipts of November 30, had been made too late to appear on the bank statement. The bank had collected for Kahn $4,800 on a note left for collection. The face of the note was $4,200. Kahn had recorded a check for $2,040 as a $2,400. The check was for the payment of a 3-year insurance policy. A check for $1,176 had been incorrectly charged by the bank as $176. Bank service charges for November amounted to $25. Required: Prepare the bank reconciliation and journalize the necessary entries.arrow_forward
- Serato Company keeps all its cash in a checking account. An examination of the entity’s accounting records and bank statement for the month ended December 31, 2020 revealed a bank statement balance of P8,469,000 and a book balance of P8,524,000. A deposit of P950,000 placed in the bank’s night depository on December 29 does not appear on the bank statement. Checks outstanding on December 31 amount to P270, 000. The bank statement shows that on December 25, the bank collected a note for Serato Company and credited the proceeds of P935,000 to the entity’s account. The proceeds included P35,000 interest, all of which Serato Company earned during the current period. Serato Company has not yet recorded the said collection. Serato Company discovered that check number 1000759 written in December for P183,000 in payment of an account had been recorded in the…arrow_forwardMarin Company’s general ledger indicates a cash balance of $22,340 as of September 30, 2018. Early in OctoberMarin received a bank statement indicating that during September Marin had an NSF check of $1,500 returnedto a customer and incurred service charges of $45. Marin also learned it had incorrectly recorded a checkreceived from a customer on September 15 as $500 when in fact the check was for $550. Calculate Marin’s correct September 30, 2018, cash balance.arrow_forwardAt the end of September 2021, Bigelow’s accounting records show a cash balance of $5,000. The September bank statement reports a cash balance of $3,900. After investigation, there was an NSF check of $1,300, service fee of $200, interest earned of $70, outstanding checks of $1,900, and a deposit in transit of $1,600. A check to Ameren correctly cleared the bank for $220 but was incorrectly recorded by Bigelow as $250. Complete a bank reconciliation and the entries for the Bigelow Company.arrow_forward
- Oscar Myer receives the March bank statement for Jam Enterprises 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. O. Myer notices that the bank erroneously cleared a $500 check against his account in March that he did not issue. The check documentation included with the bank statement shows that this check was actually issued by a company named Jam Systems. On March 25, the bank lists a $50 charge for the safety deposit box expense that Jam Enterprises agreed to rent from the bank beginning March 25. On March 26, the bank lists a $102 charge for printed checks that Jam Enterprises ordered from the bank. On March 31, the bank lists $33 interest earned on Jam Enterprises' checking account for the month of March. O. Myer notices that the check he issued for $128 on March 31, 2018, has not yet cleared the bank. O. Myer verifies that all deposits…arrow_forwardThe following information is available for Ashley Company for the month ending June 30, 2019. Balance as per the bank statement is $11,240. Balance as per books is $10,200. Check #506 for $1,200 and check #510 for $900 were not shown on the June 30 bank statement. A deposit in transit of $3,110 had not been received by the bank when the bank statement was generated. A bank debit memo indicated an NSF check for $85 written by Maddie Wolfe to Ashley Company on June 13. A bank credit memo indicated a note collected by the bank of $2,100 and interest revenue of $55 on June 20. The bank statement indicated service charges of $20. Prepare bank reconciliation for Ashley Company for June 30, 2019.arrow_forwardOscar Myer receives the March bank statement for Jam Enterprises 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. O. Myer notices that the bank erroneously cleared a $500 check against his account in March that he did not issue. The check documentation included with the bank statement shows that this check was actually issued by a company named Jam Systems. On March 25, the bank lists a $50 charge for the safety deposit box expense that Jam Enterprises agreed to rent from the bank beginning March 25. On March 26, the bank lists a $102 charge for printed checks that Jam Enterprises ordered from the bank. On March 31, the bank lists $33 interest earned on Jam Enterprises' checking account for the month of March. O. Myer notices that the check he issued for $128 on March 31, 2018, has not yet cleared the bank. O. Myer verifies that all deposits…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub
Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,