Question

TJ Company's cash ledger reports the following for the month ending October 31, 20XE. Deposits Date 3-Oct 10-Oct 17-Oct 24-Oct Cash receipts 10/26-10/27 No. 1151 1152 Amount $20,000 25,000 26,000 24,000 12,000 $107,000 1153 Checks Date Amount 4-Oct $15,000 6-Oct 8,000 15-Oct 24,000 16-Oct 1,200 20-Oct 3,000 22-Oct 25,000 29-Oct 8,000 $84,200 1154 1155 1156 1157 Balance on October 1 $20,000 Receipts Disbursements Balance on October 31 107,000 84,200 $42,800 Information from October's bank statement and company records reveals the following additional information: a) The ending cash balance shown on the bank statement is $52,380. b) Cash receipts of $12,000 from 10/26-10/27 are outstanding. c) Checks 1156 and 1157 are outstanding. d) The deposit on 10/24 includes a customer's check for $2,000 that did not clear the bank (NSF check). e) Check 1154 was written for $12,000 for equipment purchased in October. The bank properly recorded the check for this amount. f) An automatic withdrawal for October rent was made on October 4 for $2,000. g) Tu's checking account earns interest based on the average daily balance. The amount of interest earned for October is $10. h) Last year, one of TJ's customers requested their A/R be converted to a Note Receivable (they owed $3,000 to TJ). On October 29th, the customer paid $3,400 ($3,000 note amount plus $400 interest) directly to the bank in payment for the amount they owed TJ. i) The bank charged the following service fees: $25 for NSF check and $5 account maintenance fee. Prepare a bank reconciliation for October 31, 20XE to assist answering the questions following: 21. $ Of the total checks written during the month, what amount should be deducted from the bank balance during reconciling the bank account? of the cash receipts, what amount should be added to the bank balance during reconciling 22. $ the bank account? Chapter 4 Page 4-3 23. When performing the bank reconciliation, how should the company treat check 1154? A. add $10,800 to the company cash account B. subtract $10,800 from company cash account C. add $10,800 to bank statement balance D. subtract $10,800 from bank statement balance 24. $_ The total amount used to reconcile the company cash account during the reconciliation was: 25. $ What is the company's cash balance after the reconciliation?

Answer 1

TJ Company
Bank reconciliation statement	Amount $			Amount $
Balance as per books	42,800.00		Balance as per bank	52,380.00
Add:			Add:
g. Interest rearmed	10.00		b. Cash receipt outstanding	12,000.00
h. Note collected by Bank directly	3,400.00		d. Cheque incorrectly charged (850-580)
Less:			Less:
d. NSF Cheque	2,000.00		c 1. Outstanding cheque- 1156	25,000.00
e. Cheque 1154 incorrectly recorded (12000-1200)	10,800.00		c 2. Outstanding cheque- 1157	8,000.00
f. Automatic withdrawal for rent	2,000.00
i 1. Bank service charges- NSF Cheque	25.00
i 1. Bank service charges- maintenance fee	5.00
Total amount used to reconcile the balance	(11,420.00)		Total amount used to reconcile the balance	(21,000.00)
Reconciled balance as per books	31,380.00		Reconciled balance as per bank	31,380.00

Answer 21	Amount $
c 1. Outstanding cheque- 1156	25,000.00
c 2. Outstanding cheque- 1157	8,000.00
Cheque to be deducted from bank balance	33,000.00
Answer 22
b. Cash receipt outstanding	12,000.00
Answer 23
Cheque 1154 should be deducted (12000-1200)	10,800.00
Answer is option B.
Answer 24
Total amount used to reconcile the balance	(11,420.00)
Answer 25
Cash balance after reconciliation	31,380.00