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Question: Use the following to answer questions 21 - 25 TJ Company's cash ledger reports the following for ...

Use the following to answer questions 21 - 25

TJ Company's cash ledger reports the following for the month ending October 31, 20XE.

Deposits			Checks
Date	Amount		No.	Date	Amount
3-Oct	$25,000		1151	4-Oct	$1,200
10-Oct	26,000		1152	6-Oct	1,800
17-Oct	23,000		1153	15-Oct	40,000
24-Oct	29,000		1154	16-Oct	10,200
Cash receipts 10/26 -10/31	19,000		1155	20-Oct	8,000
	$122,000		1156	22-Oct	600
			1157	29-Oct	42,000
Balance on October 1	$36,000				$103,800
Receipts	122,000
Disbursements	103,800
Balance on October 31	$54,200

Information from October's bank statement and company records reveals the following additional information:

1. The ending cash balance shown on the bank statement is $74,410.
2. Cash receipts of $19,000 from 10/26–10/31 are outstanding.
3. Checks 1156 and 1157 are outstanding.
4. The deposit on 10/24 includes a customer's check for $3,000 that did not clear the bank (NSF check).
5. Check 1154 was written for $12,000 for equipment purchased in October. The bank properly recorded the check for this amount.
6. An automatic withdrawal for October rent was made on October 4 for $4,000.
7. TJ’s checking account earns interest based on the average daily balance. The amount of interest earned for October is $50.
8. Last year, one of TJ’s customers requested their A/R be converted to a Note Receivable (they owed $5,000 to TJ). On October 29th, the customer paid $5,400 ($5,000 note amount plus $400 interest) directly to the bank in payment for the amount they owed TJ.
1. The bank charged the following service fees: $25 for NSF check and $15 account maintenance fee.

Prepare a bank reconciliation for October 31, 20XE to assist answering the questions following:

21. $___________Of the total checks written during the month, what amount should be deducted from the bank balance during reconciling the bank account?                                                                                 

22. $___________            Of the cash receipts, what amount should be added to the bank balance during reconciling the bank account?                                                                                                                                       

23. When performing the bank reconciliation, how should the company treat check 1154?

A. add $1,800 to the company cash account

B. subtract $1,800 from company cash account

C. add $1,800 to bank statement balance

D. subtract $1,800 from bank statement balance

24. $___________The total amount of subtractions from the company cash account during the reconciliation (DO NOT INCLUDE THE ADDITIONS; also do not make the answer negative):                                                                                 

25. $___________What is the company’s cash balance after the reconciliation?               

Answer 1

	Bank Reconciliation Statement	Amount
	Closing as Per Cash Ledger	$ 54,200
Adjustment
1	Cash Receipt From 26-31 Oct Not Yet Deposited	$(19,000)
2	Cheque 1156 and 1157 issued but not yet presented for payment	$ 42,600
3	Receipt Deposited but not Yet Cleared	$   (3,000)
4	Cheque 1154 error (10200-12000)	$   (1,800)
5	Automatic Payment Of Rent not entered In Cash Ledger	$   (4,000)
6	Interest earned not recorded in Cash Ledger	$          50
7	Direct Payment received in Bank not entered in Cash Ledger	$    5,400
8	Bank Charged not entered in Cash Ledger	$        (40)
	Closing as per Bank Statement	$ 74,410

21. $ 63,000

23. B

24. $ 27,840

25. $74,410

26. $53,810