Page 362 - Accounting Principles (A Business Perspective)

8. Control of cash

Ledger account balance. 2010 October 31 8,088
Proceeds of a note collected by bank not yet entered in
ledger (includes $500 of interest) 6,000
Bank service charges not yet entered by Reed Company 18
Deposit in transit 1,680
Outstanding checks:
No. 327 654
No. 328 288
No. 329 390
No. 331 252
Exercise E The following is a bank reconciliation for Brian company as of August 31.
Balance per bank statement, August 31 $ 7,470
Add: Deposit in transit 5,676
$13,146
Less: Outstanding checks 6,024
Adjusted balance, August 31 $ 7,122
Balance per ledger, August 31 $ 7,248
Add: Error correction* 54
$ 7,302
Less: NSF check $150
Service and collection charges 30 180
Adjusted balance, August 31 $ 7,122
Prepare the journal entry or entries needed to adjust or correct the Cash account.
Exercise F On March 1 of the current year, Shelbey Company had outstanding checks of USD 15,000. During
March, the company issued an additional USD 57,000 of checks. As of March 31, the bank statement showed USD

48,000 of checks had cleared the bank during the month. What is the amount of outstanding checks on March 31?
Exercise G Matson Company's bank statement as of August 31, shows total deposits into the company's
account of USD 15,000 and a total of 14 separate deposits. On July 31, deposits of USD 410 and USD 330 were in
transit. The total cash receipts for August were USD 19,000, and the company's records show 13 deposits made in
August. What is the amount of deposits in transit at August 31?
Exercise H Holder Company deposits all cash receipts intact each day and makes all payments by check. On
October 31, after all posting was completed, its Cash account had a debit balance of USD 4,325. The bank statement
for the month ended on October 31 showed a balance of USD 3,988. Other data are:
Outstanding checks total USD 425.

October 31 cash receipts of USD 838 were placed in the bank's night depository and do not appear on the bank
statement.
Bank service charges for October are USD 14.
Check No. 772 for store supplies on hand was entered at USD 405, but paid by the bank at its actual amount of
USD 315.
Prepare a bank reconciliation for Holder Company as of October 31. Also prepare any necessary journal entry or
entries.

Exercise I On August 31, Brighton Company's petty cash fund contained coins and currency of USD 260, an
IOU from an employee of USD 30, and vouchers showing expenditures of USD 120 for postage, USD 52 for taxi
fare, and USD 138 to entertain a customer. The Petty Cash account shows a balance of USD 600. The fund is
replenished on August 31 because financial statements are to be prepared. What journal entry is required on August
31?
Exercise J Use the data in the previous exercise. What entry would have been required if the amount of coin
and currency had been USD 247.20? Which of the accounts debited would not appear in the income statement?

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