The cash account for Coastal Bike Co. at October 1, 20Y9, indicated a balance of $5,140. During October, the total cash deposited was $39,175, and checks written totaled $40,520. The bank statement indicated a balance of $8,980 on October 31, 20Y9. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:
a. | Checks outstanding totaled $5,560. |
b. | A deposit of $1,050 representing receipts of October 31, had been made too late to appear on the bank statement. |
c. | The bank had collected for Coastal Bike Co. $2,120 on a note left for collection. The face of the note was $2,000. |
d. | A check for $370 returned with the statement had been incorrectly charged by the bank as $730. |
c. | A check for $310 returned with the statement had been recorded by Coastal Bike Co. as $130. The check was for the payment of an obligation to Rack Pro Co. on account. |
e. | Bank service charges for October amounted to $25. |
f. | A check for $880 from Bay View Condos was returned by the bank due to insufficient funds. |
Instructions | |
1. | Prepare a bank reconciliation as of October 31, 20Y9. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. "Add:" & "Deduct:" will automatically appear if it is required. For those boxes in which you must enter subtracted or negative numbers use a minus sign. |
2. | Journalize the necessary entries. Refer to the Chart of Accounts for exact wording of account titles. |
3. | If a balance sheet were prepared for Coastal Bike Co. on October 31, 20Y9, what amount should be reported as cash? |
X
Chart of Accounts
CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Coastal Bike Co. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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X
Amount Descriptions
Amount Descriptions | |
Adjusted balance | |
Bank error in charging check as $730 instead of $370 | |
Bank service charges | |
Check returned because of insufficient funds | |
Deposit in transit on October 31 | |
Error in recording check | |
Note collected by bank, including $120 interest | |
Outstanding checks | |
Total additions | |
Total deductions |
X
Bank Reconciliation
Shaded cells have feedback.
1. Prepare a bank reconciliation as of October 31, 20Y9. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. "Add:" & "Deduct:" will automatically appear if it is required. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Score: 96/116
Coastal Bike Co. |
Bank Reconciliation |
October 31, 20Y9 |
1 |
Cash balance according to bank statement |
✔ |
|
2 |
✔ |
✔ |
|
3 |
✔ |
✔ |
|
4 |
✔ |
✔ |
|
5 |
✔ |
||
6 |
✔ |
✔ |
|
7 |
|||
8 |
Cash balance according to company’s records |
✔ |
|
9 |
✔ |
✔ |
|
10 |
✔ |
||
11 |
✔ |
||
12 |
✔ |
||
13 |
✔ |
||
14 |
✔ |
✔ |
Cash balance on oct 1 | 5,140 | ||||||
Add:total cash deposited | 39,175 | ||||||
less:total checks written | -40,520 | ||||||
Cash balance on oct 31 | 3,795 | ||||||
Bank Reconciliation | |||||||
Cash balance according to bank statement | 8,980 | ||||||
Adjustments: | |||||||
Deposits of Oct 31,not recorded by bank | 1,050 | ||||||
Bank error in charging check as $730 instead of $370 | 360 | ||||||
outstanding checks | 5,560 | ||||||
total adjustments | -4,150 | ||||||
Adjusted balance | 4,830 | ||||||
cash balance according to company's records | 3,795 | ||||||
proceeds of note collected by bank ,including $120 interest | 2,120 | ||||||
Bank service charges | 25 | ||||||
checks returned due to insuffiecient funds | 880 | ||||||
Error in recording check | 180 | ||||||
total adjustments | 1,035 | ||||||
Adjusted balance | 4,830 | ||||||
Entries that increase cash | |||||||
Account titles & explanations | debit | Credit | |||||
cash | 2,120 | ||||||
note receivable | 2,000 | ||||||
interest income | 120 | ||||||
Accounts payable-Rack pro co | 180 | ||||||
Accounts recievable -bay view condos | 880 | ||||||
bank service charges/misc expense | 25 | ||||||
cash | 1085 | ||||||
3) | amount to be reported as cash | 4,830 | |||||
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