E7-8 Prepare bank reconciliation and adjusting entries
The following information pertains to Joyce Company.
1.
Cash balance per bank, July 31, $7,328.
2.
July bank service charge not recorded by the depositor $38.
3.
Cash balance per books, July 31, $7,364.
4.
Deposits in transit, July 31, $2,700.
5.
Note for $2,000 collected for Joyce Company in July by the bank, plus
interest $36 less fee $20. The collection has not been recorded by Joyce
Company, and no interest has been accrued.
6.
Outstanding checks, July 31, $686.
Instructions
(a)
Prepare a bank reconciliation at July 31, 2014.
(b)
Journalize the adjusting entries at July 31 on the books of Joyce Company.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . (a) JOYCE COMPANY
Bank Reconciliation
July 31, 2014
Cash balance per bank statement
Add: Deposits in transit
Less: Outstanding checks
Adjusted cash balance per bank
Cash balance per books
Add: Collection of note receivable
Less: Bank service charge
Adjusted cash balance per books (b) July 31 Account
Account Value
Value
?
Value
?
Value
Value
?
Value
? Value
Value
Account
Account July 31 Account Value
Value Value
Account Value ells with a "?" . E7-9 Prepare bank reconciliation and adjusting entries
This information relates to the Cash account in the ledger of Treanor Company.
Balance September 1 - $16,400; Cash deposited - $64,000
Balance September 30 - $17,600; Checks written - $62,800
The September bank statement shows a balance of $16,500 at September 30 and the
following memoranda.
Credits
Collection of $1,800 note plus interest $30
Interest earned on checking account Debits
$1,830 NSF checks: H. Kane
45 Safety deposit box rent $560
60 At September 30, deposits in transit were $4,738 and outstanding checks totaled $2,383.
Instructions
(a) Prepare the bank reconciliation at September 30, 2014.
(b) Prepare the adjusting entries at September 30, assuming (1) the NSF check was from a
customer on account, and (2) no interest had been accrued on the note.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . (a) TREANOR COMPANY
Bank Reconciliation
September 30, 2014
Cash balance per bank statement
Add: Deposits in transit Value
Value
?
Value
? Less: Outstanding checks
Adjusted cash balance per bank
Cash balance per books
Add: Collection of note receivable
Interest earned
Less: NSF check
Safety deposit box rent
Adjusted cash balance per books (b) Sept. 30 Account Value
Value
Value
Value Value
?
?
? Value
Account
Account Value
Value 30 Account Value
Account 30 Account Value Value
Account 30 Account Value Value
Account Value a in cells with a "?" . E7-14 Prepare a cash budget for two months
Enright company expects to have a cash balance of $46,000 on January 1, 2014.
These are the relevant monthly budget data for the first two months of 2014.
1.
Collection from customers: January $71,000, February $146,000.
2.
Payments to suppliers: January $40,000, February $75,000.
3.
Wages: January $30,000, February $40,000. Wages are paid in the month
they are incurred.
4.
Administrative expenses: January $21,000, February $24,000. These costs
include depreciation of $1,000 per month. All other costs are paid as incurred.
5.
Selling expenses: January $15,000, February $20,000. These costs are exclusive
of depreciation. They are paid as incurred.
6.
Sales of short-term investments in January are expected to realize $12,000 in
cash. Enright has a line of credit at a local bank that enables it to borrow up
to $25,000. The company want to maintain a minimum monthly cash balance
of $20,000.
Instructions
Prepare a cash budget for January and February.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . ENRIGHT COMPANY
Cash Budget
For the Two Months Ending February 28, 2014
January
Value Beginning cash balance
Add: Cash receipts
Collections from customers
Sale of short-term investments
Total receipts
Total available cash
Less: Cash disbursements
Payments to suppliers
Wages
Administrative expenses
Selling expenses
Total disbursements
Excess (deficiency) of available cash over disbursements
Financing
Add: Borrowings
Less: Repayments
Ending cash balance February
Value Value
Value
?
? Value
Value
?
? Value
Value
Value
Value
?
? Value
Value
Value
Value
?
? Value
Value
? Value
Value
? cells with a "?" .

 

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