Question

The following is a list of items that could cause the book balance for cash of...

The following is a list of items that could cause the book balance for cash of Tamarisk Services to differ from Tamarisk’s bank statement balance from RBC (Royal Bank).

Identify if the item should be included as a reconciling item in Tamarisk’s bank reconciliation. Indicate if a journal entry will be needed to correct any of the account for Tamarisk.

                                                                                                                        Type Of Reconciliation            Journal                                                                                                                                                                        Entry

A deposit of collections on account from customers was made, but the amount did not match what appeared on the bank statement. The correct amount of $4,390, shown on the bank statement should have been used in Tamarisk’s books instead of the amount recorded of $4,489.

Does not affect bank reconciliation/Deduct from cash balance as per books/Add to cash balance per books/Deduct from cash balance per bank/Add to cash balance per bank

Yes/No

Included on the bank statement is an automatic charge for Tamarisk Service’s monthly mortgage payment. The amount of the payment was $930 of which $555 is principal. Tamarisk’s bookkeeper always waits for the transaction to appear on the bank statement before recording it because the amount varies from month to month.

Does not affect bank reconciliation/Deduct from cash balance as per books/Add to cash balance per books/Deduct from cash balance per bank/Add to cash balance per bank

Yes/No

When retracing cheque payments to the journals during the bank reconciliation process, it was noticed that a $1,570 cheque, payable to Tamarisk Service’s landlord for the current month’s rent, was charged to Advertising Expense.

Does not affect bank reconciliation/Deduct from cash balance as per books/Add to cash balance per books/Deduct from cash balance per bank/Add to cash balance per bank

Yes/No

On the previous month’s bank reconciliation, an outstanding cheque for $320 for a final pay cheque of a part-time employee had not yet been cashed. On the current month bank statement, the cheque has still not cleared the bank account.

Does not affect bank reconciliation/Deduct from cash balance as per books/Add to cash balance per books/Deduct from cash balance per bank/Add to cash balance per bank

Yes/No

Tamarisk has an agreement with RBC to collect notes receivable and any outstanding interest on the notes. Tamarisk’s bookkeeper waits to record any collection until the amounts are reported by RBC, because it is not predictable how much of the collection will be interest. On the current bank statement, an entry appears for a deposit of $1,145 for a collection of a note with a principal amount of $955.

Does not affect bank reconciliation/Deduct from cash balance as per books/Add to cash balance per books/Deduct from cash balance per bank/Add to cash balance per bank

Yes/No

Appearing on the bank reconciliation is a charge for an NSF cheque of $570 which had been deposited earlier in the month by Tamarisk as a payment on account by a new customer. RBC had added an additional charge of $21 for processing the NSF cheque. Because the customer was new, Tamarisk warned the customer that any NSF charges would be added to the amount owing from the customer.

Does not affect bank reconciliation/Deduct from cash balance as per books/Add to cash balance per books/Deduct from cash balance per bank/Add to cash balance per bank

Yes/No

A cheque correctly issued in the amount of $490 as a payment on account to a supplier was incorrectly recorded in the books as $590.

Does not affect bank reconciliation/Deduct from cash balance as per books/Add to cash balance per books/Deduct from cash balance per bank/Add to cash balance per bank

Yes/No

Two cheques totalling $325, which were outstanding at the end of the last month, cleared in the current month’s bank statement.

Included in the bank statement are charges of $34 for the use of debit cards by Tamarisk’s customers. Tamarisk waits for the information to be processed by the bank before recording them in the books.

Does not affect bank reconciliation/Deduct from cash balance as per books/Add to cash balance per books/Deduct from cash balance per bank/Add to cash balance per bank

Yes/No

No.

Account Titles and Explanation

Debit

Credit

1.

2.

3.

4.

5.

6.

7.

8.

9.

Homework Answers

Answer #1

A deposit of collections on account from customers was made, but the amount did not match what appeared on the bank statement. The correct amount of $4,390, shown on the bank statement should have been used in Tamarisk’s books instead of the amount recorded of $4,489.

Deduct from cash balance as per books.

Yes

Included on the bank statement is an automatic charge for Tamarisk Service’s monthly mortgage payment. The amount of the payment was $930 of which $555 is principal. Tamarisk’s bookkeeper always waits for the transaction to appear on the bank statement before recording it because the amount varies from month to month.

Deduct from cash balance as per books

Yes

When retracing cheque payments to the journals during the bank reconciliation process, it was noticed that a $1,570 cheque, payable to Tamarisk Service’s landlord for the current month’s rent, was charged to Advertising Expense.

Does not affect bank reconciliation

Yes

On the previous month’s bank reconciliation, an outstanding cheque for $320 for a final pay cheque of a part-time employee had not yet been cashed. On the current month bank statement, the cheque has still not cleared the bank account.

Deduct from cash balance per bank

No

Tamarisk has an agreement with RBC to collect notes receivable and any outstanding interest on the notes. Tamarisk’s bookkeeper waits to record any collection until the amounts are reported by RBC, because it is not predictable how much of the collection will be interest. On the current bank statement, an entry appears for a deposit of $1,145 for a collection of a note with a principal amount of $955.

Add to cash balance per books

Yes

Appearing on the bank reconciliation is a charge for an NSF cheque of $570 which had been deposited earlier in the month by Tamarisk as a payment on account by a new customer. RBC had added an additional charge of $21 for processing the NSF cheque. Because the customer was new, Tamarisk warned the customer that any NSF charges would be added to the amount owing from the customer.

Deduct from cash balance as per books

Yes

A cheque correctly issued in the amount of $490 as a payment on account to a supplier was incorrectly recorded in the books as $590.

Add to cash balance per books

Yes

Two cheques totalling $325, which were outstanding at the end of the last month, cleared in the current month’s bank statement.

Included in the bank statement are charges of $34 for the use of debit cards by Tamarisk’s customers. Tamarisk waits for the information to be processed by the bank before recording them in the books.

1] Accounts receivable [4489-4390] $               99
Cash $                99
2] Mortgage loan $             555
Interest expense $             375
Cash $             930
3] Rent expense $         1,570
Advertising expense $          1,570
4] No entry required
5] Cash $         1,145
Notes receivable $             955
Interest income $             190
6] Accounts receivable $             591
Cash $             591
7] Cash $             100
Accounts payable [590-490] $             100
8] No entry required
9] Bank charges $               34
Cash $                34

Does not affect bank reconciliation

Deduct from cash balance as per books

No

Yes

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The following is a list of items that could cause the book balance for cash of...
The following is a list of items that could cause the book balance for cash of Marin Services to differ from Marin’s bank statement balance from RBC (Royal Bank). Identify if the item should be included as a reconciling item in Marin’s bank reconciliation. Indicate if a journal entry will be needed to correct any of the account for Marin. Type of reconciling item Journal Entry? 1. A deposit of collections on account from customers was made, but the amount...
Marigold Corp. is preparing a bank reconciliation and has identified the following potential reconciling items. For...
Marigold Corp. is preparing a bank reconciliation and has identified the following potential reconciling items. For each item, indicate if it is added to the balance per bank statement, deducted from the balance per bank statement, added to the balance per books, deducted from the balance per books, or not needed for the reconciliation. 1. Deposit in transit of $5,600. select an option Added to the balance per bank statement Added to the balance per books deducted from the balance...
Using the code letters below, indicate how each of the items listed would be handled in...
Using the code letters below, indicate how each of the items listed would be handled in preparing a bank reconciliation for the month of May for Pinar dairy Company. (8 points) Code A Add to cash balance per books B Deduct from cash balance per books C Add to cash balance per bank D Deduct from cash balance per bank E Does not affect the bank reconciliation A Check of $591 was received and deposited in the company’s bank account,...
Exercise 7-15 On August 31, 2021, Sheridan Company had a cash balance per its books of...
Exercise 7-15 On August 31, 2021, Sheridan Company had a cash balance per its books of $26,660. The bank statement on that date showed a balance of $17,760. A comparison of the bank statement with the Cash account revealed the following. 1. The August 31 deposit of $17,050 was not included on the August bank statement. 2. The bank statement shows that Sheridan received EFT deposits from customers on account totalling $2,420 in August. Sheridan has not recorded any of...
Seattle Coffee Limited's bank statement for the month of November 2018 showed a balance per bank...
Seattle Coffee Limited's bank statement for the month of November 2018 showed a balance per bank of $7,000. The company's general ledger Cash account showed a balance of $5,659 at November 30. Other information is as follows: 1.    Cash receipts for November 30 recorded on the company's books were $5,200, but this amount does not appear on the bank statement. 2.    The bank statement shows a debit memorandum for $40 for cheque printing charges. 3.    Cheque #119 payable in the...
Bank Reconciliation A bank reconciliation explains the causes for any differences between a company's cash balance...
Bank Reconciliation A bank reconciliation explains the causes for any differences between a company's cash balance on its bank statement and its cash balance on the books (that is, in the ledger. ) Allez Company's monthly bank statement shows an account balance of $6127.23. The cash balance in its ledger is $5301.05. A thorough bank reconciliation investigation yields the following information: The bank erroneously deducted $346.70 from the company's account when the actual amount of a check written by the...
The following information regarding cash for Alpha Company is provided for the month ending March 31,...
The following information regarding cash for Alpha Company is provided for the month ending March 31, 2016: Item Amount Ending Cash per Bank Statement Ending Cash per books $22,484 $14,794 Note collected by bank included interest of $106 $5,106 Bank Service Charges $35 Deposits in Transit $1,776 Outstanding Cheques $4,717 Customer Cheque returned NSF $322 Do the bank reconciliation in order to find the adjusted cash balance.
The following information is for Carla Vista Company in September: 1. Cash balance per bank, September...
The following information is for Carla Vista Company in September: 1. Cash balance per bank, September 30, $6,900. 2. Cash balance per books, September 30, $5,430. 3. Outstanding cheques, $3,150. 4. Bank service charge, $21. 5. NSF cheque from customer, $240. 6. Deposits in transit, $1,557. 7. EFT receipts from customers in payment of their accounts, $84. 8. Cheque #212 was correctly written and posted by the bank as $428. Carla Vista Company had recorded the cheque as $482 in...
Whispering Winds Spa shows a general ledger balance for the Cash account of $4,169.35 on June...
Whispering Winds Spa shows a general ledger balance for the Cash account of $4,169.35 on June 30 and the bank statement as of that date indicates a balance of $4,195.00. When the statement was compared with the cash records, the following facts were determined: 1. There were bank service charges for June of $23.00. 2. A bank memo stated that Bao Dai’s note for $906.00 and interest of $51.00 had been collected on June 29, and the bank had charged...
On November 30, 2017, the cash account shows a balance of $38,000 before reconciliation. The bank...
On November 30, 2017, the cash account shows a balance of $38,000 before reconciliation. The bank statement for November does not include a deposit of $2,300 made on the last day on the month. The bank statement shows a collection by the bank of $940 and a customer check for $220 was returned because it is NSF. A customer’s check for $450 was recorded on the books as $540, and a check written for $79 for payment of an account...