The cash account for Online Medical Co. at June 30, 2012, indicated a balance of $9,375

PR 8-3A Bank reconciliation and entries

The cash account for Online Medical Co. at June 30, 2012, indicated a balance of $9,375. The bank statement indicated a balance of $10,760 on June 30, 2012. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:
a. Checks outstanding totaled $3,900.
b. A deposit of $4,000, representing receipts of June 30, had been made too late to appear on the bank statement.
c. The bank had collected $2,100 on a note left for collection. The face of the note was $2,000.
d. A check for $550 returned with the statement had been incorrectly recorded by Online Medical Co. as $500. The check was for the payment of an obligation to Hirsch Co. for the purchase on account.
e. A check drawn for $60 had been erroneously charged by the bank as $600.
f. Bank service charges for June amounted to $25.

Instructions
1. Prepare a bank reconciliation
2. Journalize the necessary entries. The accounts have not been closed.
3. If a balance sheet were prepared for Online Medical Co. on June 30, 2012, what amount should be reported as cash?

Click here for the solution: The cash account for Online Medical Co. at June 30, 2012, indicated a balance of $9,375

(Bank reconciliation and entries) Oneida Furniture Company deposits all cash receipts each Wednesday and Friday in a night depository, after banking hours

PR 8-5A Bank reconciliation and entries

Oneida Furniture Company deposits all cash receipts each Wednesday and Friday in a night depository, after banking hours. The data required to reconcile the bank statement as of June 30 have been taken from various documents and records and are reproduced as follows. The sources of the data are printed in capital letters. All checks were written for payments on account.

AND SO ON

Instructions
1. Prepare a bank reconciliation as of June 30. If errors in recording deposits or checks are discovered, assume that the errors were made by the company. Assume that all deposits are from cash sales. All checks are written to satisfy accounts payable.
2. Journalize the necessary entries. The accounts have not been closed.
3. What is the amount of Cash that should appear on the balance sheet as of June 30?
4. Assume that a canceled check for $270 has been incorrectly recorded by the bank as $720. Briefly explain how the error would be included in a bank reconciliation and how it should be corrected.

Check: 1. Adjusted Balance: $13,900.50

Click here for the solution: (Bank reconciliation and entries) Oneida Furniture Company deposits all cash receipts each Wednesday and Friday in a night depository, after banking hours

(Bank reconciliation and internal control) The records of Parker Company indicate a July 31 cash balance of $10,400, which includes undeposited receipts for July 30 and 31

CP 8-5 Bank reconciliation and internal control (25th edition)

The records of Parker Company indicate a July 31 cash balance of $10,400, which includes undeposited receipts for July 30 and 31. The cash balance on the bank statement as of July 31 is $10,575. This balance includes a note of $2,250 plus $150 interest collected by the bank but not recorded in the journal. Checks outstanding on July 31 were as follows: No. 2670, $1,050; No. 3679, $675; No. 3690, $1,650; No. 5148, $225; No. 5149, $750; and No. 5151, $800. On July 25, the cashier resigned, effective at the end of the month. Before leaving on July 31, the cashier prepared the following bank reconciliation:


Cash balance per books, July 31 .................................... $10,400

Add outstanding checks:
No. 5148 ........................................................ $225


5149 ........................................................ 750

5151 ........................................................ 800 1,675

$12,075


Less undeposited receipts ......................................... 1,500

Cash balance per bank, July 31 ..................................... $10,575

Deduct unrecorded note with interest .............................. 2,400

True cash, July 31.................................................. $ 8,175


Calculator Tape of Outstanding Checks:

0*

225

750

800

1,675*


Subsequently, the owner of Parker Company discovered that the cashier had stolen an unknown amount of undeposited receipts, leaving only $1,500 to be deposited on July 31. The owner, a close family friend, has asked your help in determining the amount that the former cashier has stolen.


1. Determine the amount the cashier stole from Parker Company. Show your computations in good form.

2. How did the cashier attempt to conceal the theft?

3. a. Identify two major weaknesses in internal controls, which allowed the cashier to steal the undeposited cash receipts.

b. Recommend improvements in internal controls, so that similar types of thefts of undeposited cash receipts can be prevented.

Click here for the solution: (Bank reconciliation and internal control) The records of Parker Company indicate a July 31 cash balance of $10,400, which includes undeposited receipts for July 30 and 31