Exercises
Exercise 7-6
Sally Rice is unable to reconcile the bank balance at January 31. Sally's reconciliation is shown here.
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Cash balance per bank
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$4,243.20
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Add: NSF check
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649.00
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Less: Bank service charge
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41.87
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Adjusted balance per bank
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$4,850.33
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Cash balance per books
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$4,541.20
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Less: Deposits in transit
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576.13
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Add: Outstanding checks
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969.00
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Adjusted balance per books
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$4,934.07
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(a) What is the proper adjusted cash balance per bank?
The proper adjusted cash balance per bank
(b) What is the proper adjusted cash balance per books?
The proper adjusted cash balance per books
(c) Prepare the adjusting journal entries necessary to determine the adjusted cash balance per books.
Exercise 7-7
At April 30, the bank reconciliation of Longacre Company shows three outstanding checks: No. 254 $673, No. 255 $871, and No. 257 $496. The May bank statement and the May cash payments journal are given here.
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Bank Statement
Checks Paid
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Date
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Check No.
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Amount
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5-4
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254
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$673
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5-2
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257
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496
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5-17
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258
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162
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5-12
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259
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344
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5-20
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260
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1,000
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5-29
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263
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480
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5-30
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262
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794
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Cash Payments Journal
Checks Issued
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Date
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Check No.
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Amount
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5-2
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258
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$162
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5-5
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259
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344
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5-10
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260
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1,000
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5-15
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261
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452
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5-22
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262
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794
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5-24
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263
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480
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5-29
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264
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391
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List the outstanding checks at May 31.
Exercise 7-8
The following information pertains to Joyce Company.
1. Cash balance per bank, July 31, $7,847.
2. July bank service charge not recorded by the depositor $49.
3. Cash balance per books, July 31, $7,883.
4. Deposits in transit, July 31, $3,219.
5. Note for $2,519 collected for Joyce Company in July by the bank, plus interest $47 less fee $31. The collection has not been recorded by Joyce Company, and no interest has been accrued.
6. Outstanding checks, July 31, $697.
Prepare a bank reconciliation at July 31, 2014.
Journalize the adjusting entries at July 31 on the books of Joyce Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Exercise 7-14
Enright Company expects to have a cash balance of $62,900 on January 1, 2014. These are the relevant monthly budget data for the first two months of 2014.
1. Collections from customers: January $87,900, February $162,900.
2. Payments to suppliers: January $56,900, February $91,900.
3. Wages: January $30,121, February $40,121. Wages are paid in the month they are incurred.
4. Administrative expenses: January $21,121, February $24,121. These costs include depreciation of $1,000 per month. All other costs are paid as incurred.
5. Selling expenses: January $15,121, February $20,121. These costs are exclusive of depreciation. They are paid as incurred.
6. Sales of short-term investments in January are expected to realize $12,121 in cash. Enright has a line of credit at a local bank that enables it to borrow up to $25,000. The company wants to maintain a minimum monthly cash balance of $36,900.
Prepare a cash budget for January and February.
Attachment:- exercises.rar