Determining the true cash balance

Reference no: EM13249558

Exercise 6-7A Treatment of NSF check

The bank statement of Stone Supplies included a $300 NSF check that one of Stone's customers had written to pay for services that were provided by Stone.

Required

a. Show the effects of recognizing the NSF check on the financial statements by recording the appropriate amounts in a horizontal statements model like the following one:

Assets = Liab + Equity Rev - Exp = Net Inc. Cash Flow

Cash + Accts Rec.

b. Is the recognition of the NSF check on Stone's books an asset source, use, or exchange transactions?

c. Suppose the customer redeems the check by giving Stone $325 cash in exchange for the bad check. The additional $25 paid a service fee charged by Stone. Show the effects on the financial statements in the horizontal statement model in Requirement a.

d. Is the receipt of cash referred to in Requirement c an asset source, use, or exchange transaction?

e. Record in general journal form the adjusting entry for the NSF check and the subsequent entry for redemption of the check by the customer.

Exercise 6-10A adjusting the cash account

As of May 31, 2013, the bank statement showed an ending balance of $26,100. The unadjusted Cash account balance was $27,350. The following information is available:

1. Deposit in transit, $6,981.

2. Credit memo in bank statement for interest earned in May, $36.

3. Outstanding check, $5,720.

4. Debit memo for service charge, $25.

Required

a. Determine the true cash balance by preparing a bank reconciliation as of May 31, 2013, using the preceding information.

b. Record in general journal format the adjusting entries necessary to correct the unadjusted book balance.

Exercise 6-11ADetermining the true cash balance, starting with the unadjusted bank balance

The following information is available for Young Company for the month of August:

1. The unadjusted balance per the bank statement on August 31 was $35,200.

2. Deposits in transit on August 31 were $3,750

3. A debit memo was included with the bank statement for a service charge of $35.

4. A $2,120 check written in August had not been paid by the bank.

5. The bank statement included a $1,550 credit memo for the collection of a note. The principal of the note was $1,500, and the interest collected was $50.

Required

Determining the true cash balance as of August 31. (Hint: It is not necessary to use all of the preceding items to determine the true balance.)

Reference no: EM13249558

Questions Cloud

Real rate of return : If the return on US Treasury bills is 7.02%, the risk premium is 2.32%, and the inflation rate is 4.16%, then the real rate of return is?

Determine the number of salespeople brown needs : Determine the number of salespeople Brown needs if it has 1,000 retail customer accounts that need to be called on five times per year. Each sales call lasts approximately 1.5 hours, and each sales rep has approximately 1,250 hours per year to devote..

What is the value of a pac ten bond : What is the value of a Pac Ten bond with a 10% coupon that matures in 15 years? Assume the current market rate for this bond is 16% ans that interest is paid annually. The investor's required rate of return is 8%

Provide an interpretation of the interval : We have no knowledge about whether waiting times follow a normal distribution. Why is it nevertheless appropriate to use inference methods which rely on the assumption of normality? Construct a 97% confidence interval for the true mean emergency wa..

Determining the true cash balance : Determining the true cash balance as of August 31. (Hint: It is not necessary to use all of the preceding items to determine the true balance.)

Explain the type of enzyme regulation : The type of enzyme regulation where a regulatory molecule binds to the enzyme and changes the shape of the active site is called

Enzymes are produced as zymogens because : Some enzymes are produced as zymogens because a) the reactions they catalyze are undesirable at the site of production

Explain the molar mass of a gas which occupies at 82oc : What is the molar mass of a gas which occupies 32.9 L at 82oC under 1.124 atm of pressure and has a mass of 23.7 grams

Find resolution of the fourier transform if signal is sample : what is the range of sampling frequencies you can use such that you don't violate Nyquist theorem and still meet or exceed the needed resolution when you perform the FFT operation on the full set of collected data

User Account

All Pages