Question

1. The following information pertains to Cullumber Company.

1.		Cash balance per bank, July 31, $7,988.
2.		July bank service charge not recorded by the depositor $53.
3.		Cash balance per books, July 31, $8,024.
4.		Deposits in transit, July 31, $3,360.
5.		$2,676 collected for Cullumber Company in July by the bank through electronic funds transfer. The collection has not been recorded by Cullumber Company.
6.		Outstanding checks, July 31, $701.

Prepare a tabular analysis for the adjustments at July 31 on the books of  Cullumber Company. Include margin explanations for the changes in revenues and expenses. (If a transaction results in a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)

2. On July 31, 2022, Teal Mountain Company had a cash balance per books of $6,285. The statement from Dakota State Bank on that date showed a balance of $7,835.80. A comparison of the bank statement with the Cash account revealed the following facts.

1.		The bank service charge for July was $17.
2.		The bank collected $1,665.00 for Teal Mountain Company through electronic funds transfer.
3.		The July 31 receipts of $1,346.30 were not included in the bank deposits for July. These receipts were deposited by the company in a night deposit vault on July 31.
4.		Company check No. 2480 issued to L. Taylor, a creditor, for $384 that cleared the bank in July was incorrectly entered in the cash payments record on July 10 for $348.
5.		Checks outstanding on July 31 totaled $2,005.10.
6.		On July 31, the bank statement showed an NSF charge of $720.00 for a check received by the company from W. Krueger, a customer, on account.

(a) Prepare the bank reconciliation as of July 31. (List items that increase balance as per bank & books first.)

3. The following information is available for Sage Hill Company for the month of January: expected cash receipts $57,490, expected cash disbursements $66,490, and cash balance on January 1, $12,420. Management wishes to maintain a minimum cash balance of $7,560.

Prepare a basic cash budget for the month of January.

Answer 1

i)	CULLUMBER Company
	Bank Reconciliation
	Month Ended July 31
	Cash Balance as per bank statement	7988
	Add: Deposit in Transit	3360
	Less: Outstanding checks	-701
	Adjusted Cash Balance	10647
	Cash balance as per books	8024
	Add: Receivable Collected	2676
	Error rectification
	Less: Bank Service charges	-53
	Adjusted Cash Balance	10647

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