Lecture07-TQ-B(1) - Lecture 7 Tutorial Questions Tutorial...

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Lecture07-TQ-B Page 1 Lecture 7 – Tutorial Questions Tutorial List: 7-1, 7 -2 , 7-3, 7 -4 , 7-5, 7-6 , 7-7, 7-8, 7-9 7-1. Kristen Hope asks your help concerning an NSF check. Explain to Kristen (a) what an NSF check is, (b) how it is treated in a bank reconciliation, and (c) whether it will require an adjusting entry.
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Lecture07-TQ-B Page 2 7-2. The bank portion of the bank reconciliation for Brasilia Company at October 31, 20X1 was as follows. BRASILIA COMPANY Bank Reconciliation October 31, 20X1 Cash balance per bank: R$6,000 Add: Deposits in Transit 842 6,842 Check Number Check Amount 2451 R$700 2470 396 2471 464 2472 270 2474 578 2,408 Adjusted cash balance per bank R$4,434 The adjusted cash balance per bank agreed with the cash balance per books at October 31. The November bank statement showed the following checks and deposits. Bank Statement Checks Desposits Date Number Amount Date Amount 11-1 2470 R$ 396 11-1 R$ 842 11-2 2471 464 11-4 666 11-5 2474 578 11-8 545 11-4 2475 903 11-13 1,416 11-8 2476 1,556 11-18 810 11-10 2477 330 11-21 1,624 11-15 2479 980 11-25 1,412 11-18 2480 714 11-28 908 11-27 2481 382 11-30 652 11-30 2483 317 Total R$ 8,875 11-29 2486 495 R$ 7,115
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Lecture07-TQ-B Page 3 7-2. (Continued) The cash records per books for November showed the following. Cash Payments Journal Date Number Amount Date Number Amount 11-1 2475 R$ 903 11-20 2483 R$ 317 11-2 2476 1,556 11-22 2484 460 11-2 2477 330 11-23 2485 525 11-4 2478 300 11-24 2486 495 11-8 2479 890 11-29 2487 210 11-10 2480 714 11-30 2488 635 11-15 2481 382 11-18 2482 350 Total R$ 8,067 Cash Receipts Journal Date Amount 11-3 R$ 666 11-7 545 11-12 1,416 11-17 810 11-20 1,642 11-24 1,412 11-27 908 11-29 652 11-30 1,541 R$ 9,592 The bank statement contained two bank memoranda: 1. A credit of R$1,375 for the collection of a R$1,300 note for Brasilia Company plus interest of R$91 and less a collection fee of R$16. Brasilia Company has not accrued any interest on the note. 2. A debit for the printing of additional company checks R$34. At November 30, the cash balance per books was R$5,959 and the cash balance per the bank statement was R$9,101. The bank did not make any errors, but two errors were made by Brasilia Company. Instructions (a) Using the four steps in the reconciliation procedure, prepare a bank reconciliation at November 30. (b) Prepare the adjusting entries based on the reconciliation. ( Hint : The correction of any errors pertaining to recording checks should be made to Accounts Payable. The correction of any errors pertaining to recording cash receipts should be made to Accounts Receivable.)
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Lecture07-TQ-B Page 4 7-3. Bummer Company’s bank statement from Fifth National Bank at August 31, 20X1, includes the information shown. Balance, August 1 $11,284 August deposits 47,521 Checks cleared in August 46,475 Balance, August 31 16,856 Bank Credit memoranda: Collection of note receivable plus $105 interest $4,505 Interest earned 41 Bank deposit memorandum: Safety deposit box rent 20 A summary of the Cash account in the ledger for August shows: Balance, August 1, $10,959; receipts $50,050; disbursements $47,794; and balance, August 31, $13,215. Analysis reveals that the only reconciling items on the July 31 bank reconciliation were a deposit in transit for $2,600 and outstanding checks of $2,925. The deposit in transit was the first deposit recorded by the bank in August. In addition, you determine that
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