Question

The cash account for Collegiate Sports Co. on November 1, 20Y9, indicated a balance of $81,145. During November, the total cash deposited was $293,150, and checks written totaled $307,360. The bank statement indicated a balance of $112,675 on November 30, 20Y9. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:

1. Checks outstanding totaled $41,840.
2. A deposit of $12,200, representing receipts of November 30, had been made too late to appear on the bank statement.
3. A check for $7,250 had been incorrectly charged by the bank as $2,750.
4. A check for $760 returned with the statement had been recorded by Collegiate Sports Co. as $7,600. The check was for the payment of an obligation to Ramirez Co. on the account.
5. The bank had collected for Collegiate Sports Co. $7,385 on a note left for collection. The face of the note was $7,000.
6. Bank service charges for November amounted to $125.
7. A check for $2,500 from Hallen Academy was returned by the bank because of insufficient funds.
Instructions:
1. Prepare a bank reconciliation as of November 30. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.
2. Journalize the necessary entries. The accounts have not been closed. Refer to the Chart of Accounts for the exact wording of account titles.
3. If a balance sheet were prepared for Collegiate Sports Co. on November 30, 20Y9, what amount should be reported as cash?

Answer 1

Answer and Explanation:

According to the scenario, computation of the given data are as follow:-

Bank Reconciliation Statement

Particular Amount ($)

According to the bank statement cash balance 112,675

Add - 30,November deposits, not recorded by bank 12,200

Less - Charging check bank error ($7,250 - $2,750) -4,500

Less - outstanding checks -$41,840

Total Balance 78,535

According to the company’s record cash balance 66,935

Add - Including $385 interest note collected by bank 7,385

Add - Error in recording check($7,600-$760) 6,840

Less - bank service charge -125

Less - Because of insufficient funds check returned -2,500

Total Balance 78,535

According to the Company’s Record Cash Balance

= Company’s Indicated November Balance + Total Cash Deposits - Written Totaled

= $81,145 + $293,150 - $307,360

= $66,935

Journal Entry

On Nov 30

Cash A/c Dr.$14,225

To Interest receivables A/c $7,000

To Accounts payable A/c $6,840

To Interest revenue A/c $385

(Being receipts of cash is recorded)

On Nov 30

Accounts receivables A/c Dr. $2,500

Miscellaneous expense A/c Dr. $125

To Cash A/c $2,625

(Being cash paid is recorded)

3). According to the analysis, the cash should be reported $78,535 if balance sheet is prepared on 30 November,2019.