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Elementary,Middle School,High School,College,University,PHD
Teaching Since: | Jul 2017 |
Last Sign in: | 307 Weeks Ago, 5 Days Ago |
Questions Answered: | 5023 |
Tutorials Posted: | 5024 |
Purpose of AssignmentÂ
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Reconciling bank accounts is a good way to help maintain internal controls over cash. With time lags and posting errors it is easy for cash transactions to be omitted, recorded in a different accounting period, or reflect incorrect amounts. This assignment with give you practical experience in reconciling the cash balance as noted on the company books to the bank's records.Â
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Assignment StepsÂ
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Resources:Â Financial Accounting: Tools for Business Decision MakingÂ
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Scenario: Daisey Company is a very profitable small business. It has not, however given much consideration to internal control. For example, in an attempt to keep clerical and office expenses to a minimum, the company has combined the jobs of cashier and book-keeper. As a result, Bret Turrin handles all cash receipts, keeps the accounting records, and prepares the monthly bank reconciliations.Â
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The balance per the bank statement on October 31, 2017, was $18,380. Outstanding checks were No. 62 for $140.75, No. 183 for $180, No. 284 for $253.25, No. 862 for $190.71, No. 863 for $226.80, and No. 864 for $165.28. Included with the statement was a credit memorandum of $185 indicating the collection of a note receivable for Daisey Company by the bank on October 25.Â
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This memorandum has not been recorded by Daisey.Â
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The company's ledger showed one Cash account with a balance of $21,877.72. The balance included undepositied cash on hand. Because of the lack of internal controls, Bret took for personal use all of the undeposited receipts in excess of $3,795.51. He then prepared the following bank reconciliation in an effort to conceal his theft of cash:
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Cash balance per books, October 31Â $21,877.72
Add: Outstanding checks Â
No. 862 $190.71Â
No. 863 226.80Â
No. 864 165.28 482.79Â Â
22,360.51
Less: Undeposited receipts 3,795.51
Unadjusted balance per bank, October 31Â 18,565.00
Less: Bank credit memorandum 185.00
Cash balance per bank statement, October 31Â $18,380.00
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Prepare a bank reconciliation report (hint: deduct the amount of the theft from the adjusted balance per books) including the following written explanations:Â
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Hel-----------lo -----------Sir-----------/Ma-----------dam----------- Â----------- -----------Tha-----------nk -----------you----------- fo-----------r y-----------our----------- in-----------ter-----------est----------- an-----------d b-----------uyi-----------ng -----------my -----------pos-----------ted----------- so-----------lut-----------ion-----------. P-----------lea-----------se -----------pin-----------g m-----------e o-----------n c-----------hat----------- I -----------am -----------onl-----------ine----------- or----------- in-----------box----------- me----------- a -----------mes-----------sag-----------e I----------- wi-----------ll -----------be -----------qui-----------ckl-----------y