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Chapter 7 lab The cash account for Stone Systems at July 31, 20Y5, indicated a balance...

Chapter 7 lab

The cash account for Stone Systems at July 31, 20Y5, indicated a balance of $17,750. The bank statement indicated a balance of $33,650 on July 31, 20Y5. Comparing the bank statement and the accompanying canceled checks and memos with the records reveals the following reconciling items:

Checks outstanding totaled $17,865.

A deposit of $9,150, representing receipts of July 31, had been made too late to appear on the bank statement.

The bank had collected $6,095 on a note left for collection. The face of the note was $5,750.

A check for $390 returned with the statement had been incorrectly recorded by Stone Systems as $930. The check was for the payment of an obligation to Holland Co. for the purchase of office supplies on account.

A check drawn for $1,810 had been incorrectly charged by the bank as $1,180.

Bank service charges for July amounted to $80.

Required:


1. Prepare a bank reconciliation.

Stone Systems
Bank Reconciliation
July 31, 20Y5
Cash balance according to bank statement $
Adjustments:
Deposit of July 31, not recorded by bank $
Bank error in charging check as $1,180 instead of $1,810
Outstanding checks
Total adjustments
Adjusted balance $
Cash balance according to company's records $
Adjustments:
Proceeds of note collected by bank, including $345 interest $
Error in recording check by Stone Systems
Bank service charges
Total adjustments
Adjusted balance $





2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. For a compound entry, if an amount box does not require an entry, leave it blank.

20Y5 July 31 Cash
Notes Receivable
Interest Revenue
Accounts Payable-Holland Co.
July 31 Miscellaneous Expense
Cash



3. If a balance sheet were prepared for Stone Systems on July 31, 20Y5, what amount should be reported as cash?
$_______________



The cash account for Collegiate Sports Co. on November 1, 20Y9, 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, 20Y9. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:

Checks outstanding totaled $41,840.

A deposit of $12,200, representing receipts of November 30, had been made too late to appear on the bank statement.

A check for $7,250 had been incorrectly charged by the bank as $2,750.

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.

The bank had collected for Collegiate Sports Co. $7,385 on a note left for collection. The face of the note was $7,000.

Bank service charges for November amounted to $125.

A check for $2,500 from Hallen Academy was returned by the bank because of insufficient funds.

Required:

1. Prepare a bank reconciliation as of November 30, 20Y9.

Collegiate Sports Co.
Bank Reconciliation
November 30, 20Y9

Cash balance according to bank statement $
Adjustments:
Deposit of November 30, not recorded by bank $
Bank error in charging check as $2,750 instead of $7,250
Outstanding checks
Total adjustments
Adjusted balance $
Cash balance according to company's records $
Adjustments:
Proceeds of note collected by bank, including $385 interest $
Error in recording check as $7,600 instead of $760
Check returned because of insufficient funds
Bank service charges
Total adjustments
Adjusted balance $



2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. For a compound entry, if an amount box does not require an entry, leave it blank.

20Y9 Nov. 30 Cash
Notes Receivable
Interest Revenue
Accounts Payable-Ramirez Co.
Nov. 30 Accounts Receivable-Hallen Academy
Miscellaneous Expense
Cash



3. If a balance sheet were prepared for Collegiate Sports Co. on November 30, 20Y9, what amount should be reported as cash?
$______

Solutions

Expert Solution

1.

Stone Systems
Bank Reconciliation
July 31, 20Y5
Cash balance according to bank statement 33650
Adjustments:
Deposit of July 31, not recorded by bank 9150
Bank error in charging check as $1,180 instead of $1,810 -630
Outstanding checks -17865
Total adjustments -9345
Adjusted balance 24305
Cash balance according to company's records 17750
Adjustments:
Proceeds of note collected by bank, including $345 interest 6095
Error in recording check by Stone Systems ($930 - $390) 540
Bank service charges -80
Total adjustments 6555
Adjusted balance 24305

2.

Date Description Debit Credit
20Y5 July 31 Cash 6635
Notes receivable 5750
Interest revenue 345
Accounts payable-Holland Co. 540
Jul-31 Miscellaneous expense 80
Cash 80

3. Amount reported as cash on July 31, 20Y5: $24305

Please post independent questions separately. Thank you.


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