Question

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The September bank statement and cash T-account for Terrick Company follow:

BANK STATEMENT
Date	Checks			Deposits			Other				Balance
Sept. 1											$	89,900
2	$	760										89,140
4		3,400										85,740
6		2,200										83,540
11		440			$15,000							98,100
13		790										97,310
17		11,400										85,910
23		160			34,000							119,750
26		840										118,910
28		9,400										109,510
29		870			17,500		NSF*	$	640			125,500
30		540					Interest earned		200			125,160
30							Service charge		50			125,110

*NSF check from B. Frank, a customer.

Cash (A)

Sept. 1       Balance	89,900		Checks written during September:
Deposits			760	9,400
Sept. 11	15,000		3,400	870
23	34,000		2,200	540
29	17,500		440	640
30	23,800		790	7,400
			11,400	160
			840
Sept. 30     Balance	141,360

    There were no deposits in transit or outstanding checks at August 31.

3.	Prepare a bank reconciliation for September.

5.	After the reconciliation journal entries are posted, what balance will be reflected in the Cash account in the ledger?

      

6.	If the company also has $270 of petty cash on hand, which is recorded in a different account called Petty Cash on Hand, what total amount of Cash and Cash Equivalents should be reported on the September 30 balance sheet?

Answer 1

Solution 3:

Terrick Company
Bank Reconciliation - September 30
Bank's Cash balance		Company's cash balance
Particulars	Amount	Particulars	Amount
Ending balance as per Bank Statements	$125,110.00	Ending Balance as per cash books	$141,360.00
Additions:		Additions:
Outstanding Deposits	$23,800.00	Interest earned	$200.00
Deductions:		Deductions:
Outstanding Checks ($640 + $7,400)	$8,040.00	NSF Check	$640.00
		Service Charge	$50.00
Up to date cash balance as per bank	$140,870.00	Up to date cash balance as per books	$140,870.00

Solution 5:

Balance to be reflected in cash account in ledger = $140,870

Solution 6:

Total amount of Cash and Cash Equivalents should be reported on the September 30 balance sheet = $140,870 + $270 = $141,140