4/9/2020 SmartBook https://learnsmart.mheducation.com/flow/lslti_provider.php?name=smartbook&userId=3910813&role=I&firstName=&lastName=&email=nblee%40brya… 1/2 Problem 8-3A Establishing, reimbursing,...

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Problem 8-4APreparing a bank reconciliation and recording adjustments


4/9/2020 SmartBook https://learnsmart.mheducation.com/flow/lslti_provider.php?name=smartbook&userId=3910813&role=I&firstName=&lastName=&email=nblee%40brya… 1/2 Problem 8-3A Establishing, reimbursing, and increasing petty cash P2 Nakashima Gallery had the following petty cash transactions in February of the current year. Feb. 2 Wrote a $400 check, cashed it, and gave the proceeds and the petty cashbox to Chloe Addison, the petty cashier. 5 Purchased paper for the copier for $14.15 that is immediately used. 9 Paid $32.50 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Nakashima uses the perpetual system to account for merchandise inventory. 12 Paid $7.95 postage to deliver a contract to a client. 14 Reimbursed Adina Sharon, the manager, $68 for mileage on her car. 20 Purchased stationery for $67.77 that is immediately used. 23 Paid a courier $20 to deliver merchandise sold to a customer, terms FOB destination. 25 Paid $13.10 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. 27 Paid $54 for postage expenses. 28 The fund had $120.42 remaining in the petty cashbox. Sorted the petty cash receipts by accounts affected and exchanged them for a check to reimburse the fund for expenditures. 28 The petty cash fund amount is increased by $100 to a total of $500. Required Problem 8-4A Preparing a bank reconciliation and recording adjustments P3 The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31, 2017. 1. Prepare the journal entry to establish the petty cash fund. 2. Prepare a petty cash payments report for February with these categories: delivery expense, mileage expense, postage expense, merchandise inventory (for transportation-in), and office supplies expense. Sort the payments into the appropriate categories and total the expenditures in each category. 3. Prepare the journal entries (in dollars and cents) for part 2 to both (a) reimburse and (b) increase the fund amount. Check Cash credit: (3a) $279.58; (3b) $100.00 a. On July 31, the company’s Cash account has a $27,497 debit balance, but its July bank statement shows a $27,233 cash balance. b. Check No. 3031 for $1,482 and Check No. 3040 for $558 were outstanding on the June 30 bank reconciliation. Check No. 3040 is listed with the July canceled checks, but Check No. 3031 is not. Also, Check No. 3065 for $382 and Check No. 3069 for $2,281, both written in July, are not among the canceled checks on the July 31 statement. c. In comparing the canceled checks on the bank statement with the entries in the accounting records, it is found that Check No. 3056 for July rent expense was correctly written and drawn for https://html1-cluster-e.mheducation.com/smartbook2/data/150087/highlighted_epubmhe/OPS/s9ml/chapter008/reader_1.xhtml#data-uuid-1a5269a5bb2748c7b12969e483a0d839 https://html1-cluster-e.mheducation.com/smartbook2/data/150087/highlighted_epubmhe/OPS/s9ml/chapter008/ch08_reader_3.xhtml#data-uuid-97ae9009e7244312b4c7858f125b5a2c 4/9/2020 SmartBook https://learnsmart.mheducation.com/flow/lslti_provider.php?name=smartbook&userId=3910813&role=I&firstName=&lastName=&email=nblee%40brya… 2/2 Required Analysis Component $1,270 but was erroneously entered in the accounting records as $1,250. d. The July bank statement shows the bank collected $8,000 cash on a noninterest-bearing note for Branch, deducted a $45 collection expense, and credited the remainder to its account. Branch had not recorded this event before receiving the statement. e. The bank statement shows an $805 charge for a $795 NSF check plus a $10 NSF charge. The check had been received from a customer, Evan Shaw. Branch has not yet recorded this check as NSF. f. The July statement shows a $25 bank service charge. It has not yet been recorded in miscellaneous expenses because no previous notification had been received. g. Branch’s July 31 daily cash receipts of $11,514 were placed in the bank’s night depository on that date but do not appear on the July 31 bank statement. 1. Prepare the bank reconciliation for this company as of July 31, 2017. 2. Prepare the journal entries necessary to bring the company’s book balance of cash into conformity with the reconciled cash balance as of July 31, 2017. Check (1) Reconciled balance, $34,602; (2) Cr. Notes Receivable, $8,000 3. Assume that the July 31, 2017, bank reconciliation for this company is prepared and some items are treated incorrectly. For each of the following errors, explain the effect of the error on (i) the adjusted bank statement cash balance and (ii) the adjusted Cash account book balance. a. The company’s unadjusted Cash account balance of $27,497 is listed on the reconciliation as $27,947. b. The bank’s collection of the $8,000 note less the $45 collection fee is added to the bank statement cash balance on the reconciliation.
Answered Same DayApr 10, 2021

Answer To: 4/9/2020 SmartBook...

Kiran answered on Apr 10 2021
136 Votes
Sheet1
    Problem 8-4A
    1. Prepare the bank reconciliation for this company as of July 31, 2017
    Ba
nk Reconciliation Statement
    As of July 31, 2017
    Balance as per Bank Statement                $27,233
    Add: Deposit in transit                $11,514
                    $38,747
    Less: Checks Outstanding
        Ch. # 3031        $1,482
        Ch. # 3065        $382
        Ch. # 3069        $2,281    $4,145
    Adjusted Bank Balance                $34,602
    Balance as per cash account                $27,497
    Add: Note collected less collection charges                $7,955
                    $35,452
    Less:    Ch. # 3056 incorrectly recorded        $20
        NSF Check plus bank charges        $805
        Bank charges on NSF Check , Service charges, and Note collected        $25    $850
    Adjusted Cash Balance                $34,602
    2. Prepare the journal entries necessary to bring the company’s book balance of cash into conformity with the reconciled cash balance as of July 31, 2017.
    GENERAL JOURNAL
    Date    Account                Debit    Credit
    July 31, 2017    Cash                $7,955
         Note...
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