You are the senior auditor-in-charge of the July 31, 20X0, audit of Reliable Auto Parts, Inc. Your newly hired staff assistant reports to you that she is unable to complete the four-column proof of cash for the month of April 20X0, which you instructed her to do as part of the consideration of internal control over cash.
Your assistant shows you the working paper that she has prepared. Your review of your assistant’s work reveals that the dollar amounts of all the items in her working paper are correct. You learn that the accountant for Reliable Auto Parts, Inc., makes no journal entries for bank service charges or note collections until the month following the bank’s recording of the item. In addition, Reliable’s accountant makes no journal entries whatsoever for NSF checks that are redeposited and cleared. Your assistant’s working paper appears below.
Required: Prepare a corrected four-column proof of cash in good form for Reliable Auto Parts, Inc., for the month of April 20X0. (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.)
Reliable Auto Parts, Inc.
Proof of Cash for April 20X0
July 31, 20X0
Balance Deposits Checks Balance
(4/30/X0)
_____________________________________________________________________________
Per bank statement $71,934.75 $61,703.21 $68,362.65 $65,275.31
Deposits in transit:
At 3/31/X0 2,125.62 (2,125.62)
At 4/30/X0 4,935.37 4,935.37
Outstanding checks:
At 3/31/X0 (14,940.45) 14,940.45
At 4/30/X0 (22,995.20) 22,995.20
Bank Service Charges:
March 20X0 (22.25) 22.25
April 20X0 (19.21) 19.21
Note Rec collected:
by bank 4/30/X0 18,250.00 18,250.00
NSF check of customer
L. G. Waite, charged back
By bank 3/31/X0,
Redeposited and
Cleared 4/3/X0 (419.52) 419.52 _______ _________
Balances as computed 58,678.15 85,308.10 60,310.94 109,349.47
Balances per book 59,561.69 45,843.44 76,420.44 28,984.69
Unlocated difference $ (883.54) $39,464.66 $(16,109.50) $80,364.78
| Reliable Auto Part Inc. | ||||
| Corrected Proof of Cash for April 2010 | ||||
| Detail | Balance | Deposit | Checks & Debit | Balance as 30/04/2010 |
| Per Bank Statement | $71,934.75 | $61,703.21 | $68,362.65 | $65,285.31 |
| Deposit in transit | ||||
| At 31/03/2010 | $2,125.62 | -$2,125.62 | ||
| At 30/04/2010 | $4,935.37 | $4,935.37 | ||
| Outstanding Check | ||||
| At 31/03/2010 | -$14,940.35 | -$14,940.35 | ||
| At 30/04/2010 | $22,995.20 | -$22,995.20 | ||
| Bank Service charges | ||||
| Mar-10 | $22.25 | $22.25 | ||
| Apr-10 | -$19.21 | $19.21 | ||
| Notes Receivable Collected | ||||
| by bank 30/04/2010 | -$18,250.00 | -$18,250.00 | ||
| NSF Check of Customer LG | ||||
| Wait Charged back by | ||||
| bank 31/03/2010, redeposited and cleared | $419.52 | $419.52 | ||
| Per Books | $59,561.79 | $46,682.48 | $76,420.54 | $28,994.69 |
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