Question

Bank Reconciliation and Entries

The cash account for All American Sports Co. on April 1, 20Y5, indicated a balance of $23,600. During April, the total cash deposited was $80,150, and checks written totaled $72,800. The bank statement indicated a balance of $40,360 on April 30, 20Y5. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:

1. Checks outstanding totaled $14,300.
2. A deposit of $9,275, representing receipts of April 30, had been made too late to appear on the bank statement.
3. A check for $720 had been incorrectly charged by the bank as $270.
4. A check for $110 returned with the statement had been recorded by All American Sports Co. as $1,100. The check was for the payment of an obligation to Garber Co. on account.
5. The bank had collected for All American Sports Co. $4,320 on a note left for collection. The face of the note was $4,000.
6. Bank service charges for April amounted to $75.
7. A check for $1,300 from Bishop Co. was returned by the bank because of insufficient funds.

Instructions:

1. Prepare a bank reconciliation as of April 30.

All American Sports Co.
Bank Reconciliation
April 30, 20Y5
Cash balance per bank statement		$
Add: Deposit of April 30, not recorded by bank
		$
Deduct: Outstanding checks	$
Deduct: Bank error in charging check as $270 instead of $720
Adjusted balance		$
Cash balance per All American Sports Co.		$
Add: Proceeds of note collected by bank, including $320 interest	$
Add: Error in recording check as $1,100 by company instead of $110
		$
Deduct: Check returned because of insufficient funds	$
Deduct: Bank service charges
Adjusted balance		$

Feedback

1. Set up two columns: one for the company cash account section and the other for the bank balance section. Determine the effect of the data on each column. Recall that when you are finished, the adjusted balances in the bank and company sections of the reconciliation must be equal. If not, an item has been overlooked or treated incorrectly.

2. Illustrate the effects on the accounts and financial statements of the bank reconciliation. If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.

Increase in Cash:

Statement of Cash Flows Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity Cash + Notes Receivable = Accounts Payable + Retained Earnings April 30 Statement of Cash Flows Income Statement Operating Interest revenue No effect No effect

Decrease in Cash:

Statement of Cash Flows Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity Cash + Accounts Receivable = No Effect + Retained Earnings April 30 Statement of Cash Flows Income Statement Operating Miscellaneous administrative expense No effect No effect

***I just need help on increase of cash and decrease of cash on the statement of cash flows please...***

Answer 1

The cash account for All American Sports Co. on April 1, 20Y5, indicated a balance of $23,600. During April, the total cash deposited was $80,150, and checks written totaled $72,800. The bank statement indicated a balance of $40,360 on April 30, 20Y5. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items

2.