Question

The cash account for Collegiate Sports Co. on November 1, 2016, indicated a balance of $81,145. During November, the total cash deposited was $293,150, and checks written totaled $307,360. The bank statement indicated a balance of $112,675 on November 30, 2016. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:

A.	Checks outstanding totaled $41,840.
B.	A deposit of $12,200, representing receipts of November 30, had been made too late to appear on the bank statement.
C.	A check for $7,250 had been incorrectly charged by the bank as $2,750.
D.	A check for $760 returned with the statement had been recorded by Collegiate Sports Co. as $7,600. The check was for the payment of an obligation to Ramirez Co. on account.
E.	The bank had collected for Collegiate Sports Co. $7,385 on a note left for collection. The face of the note was $7,000.
F.	Bank service charges for November amounted to $125.
G.	A check for $2,500 from Hallen Academy was returned by the bank because of insufficient funds.

	Instructions
1.	Prepare a bank reconciliation as of November 30. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. “Deduct:” or “Add:” will automatically appear if it is required.
2.	Journalize the necessary entries. The accounts have not been closed. Refer to the Chart of Accounts for exact wording of account titles.
3.	If a balance sheet were prepared for Collegiate Sports Co. on November 30, 2016, what amount should be reported as cash?

Chart of Accounts

CHART OF ACCOUNTS
Collegiate Sports Co.
General Ledger
ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable-Hallen Academy 131 Notes Receivable 141 Merchandise Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 181 Land 191 Office Equipment 192 Accumulated Depreciation-Office Equipment 193 Store Equipment 194 Accumulated Depreciation-Store Equipment LIABILITIES 211 Accounts Payable-Ramirez Co. 221 Notes Payable 222 Interest Payable 231 Salaries Payable 241 Sales Tax Payable EQUITY 310 Owner, Capital 311 Owner, Drawing 312 Income Summary	REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 515 Credit Card Expense 516 Cash Short and Over 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Insurance Expense 534 Office Supplies Expense 535 Rent Expense 536 Repairs Expense 537 Selling Expenses 538 Store Supplies Expense 561 Depreciation Expense-Office Equipment 562 Depreciation Expense-Store Equipment 590 Miscellaneous Expense 710 Interest Expense

Amount Descriptions

Amount Descriptions
Bank error in charging check as $2,750 instead of $7,250
Bank error in charging check as $7,250 instead of $2,750
Bank error in charging Hallen Academy check
Bank service charges
Check returned because of insufficient funds
Company error in recording note collected by bank
Deposit of November 30, not recorded by bank
Error in recording check as $7,600 instead of $760
Outstanding checks
Proceeds of note collected by bank, including $385 interest

Bank Reconciliation

1. Prepare a bank reconciliation as of November 30. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. “Deduct:” or “Add:” will automatically appear if it is required. Whenever there is more than one adjusting item in the bank portion of the reconciliation or the general ledger portion of the bank reconciliation, enter in the order presented in the instructions.

COLLEGIATE SPORTS CO.

Bank Reconciliation

November 30, 2016

1	Cash balance according to bank statement
2
3
4
5
6	Adjusted balance
7
8	Cash balance according to company’s records
9
10
11
12
13
14	Adjusted balance

Journal

2. Journalize the necessary entries. The accounts have not been closed. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7

Final Question

3. If a balance sheet were prepared for Collegiate Sports Co. on November 30, 2016, what amount should be reported as cash?

Answer 1

1

COLLEGIATE SPORTS CO.
Bank Reconciliation
30-Nov-16
Cash balance according to bank statement		112675
Add: deposited of Nov 30 not recorded in bank	12200
Less: Outstanding cheque	-41840
bank error (7250-2750)	-4500	-34140
		78535
Adjusted balance
Cash balance according to company’s records (81145+293150-307360)		66935
Add: Collection of note with interest	7385
Error in recording cheque (7600-760)	6840
Less:
Bank service fee	-125
NSG cheque	-2500
		11600
Adjusted balance		78535

_______________________________

2

DATE	DESCRIPTION	DEBIT	CREDIT
30-Nov	Cash	14225
	Note receivable		7000
	Interest revenue		385
	Account payable Remirez company		6840
30-Nov	Account receivable	2500
	Miscellanies Expanses	125
	Cash		2625

______________________________

3

If a balance sheet were prepared for Collegiate Sports Co. on November 30, 2016, what amount should be reported as cash?

Cash balance is equal to adjusted balances per the bank reconciliation statement

So, Cash balance =$78,535