Oscar's Red Carpet Store maintains a checking account with Academy Bank. Oscar's sells carpet each day but makes bank deposits o
nly once per week. The following provides information from the company's cash ledger for the month ending February 28, 2018.
Date Amount
Deposits: 2/4 $2,700
2/11 2,300
2/18 3,200
2/25 4,100
Cash receipts: 2/26-2/28 1,600
$13,900
Checks
No. Date Amount
321 2/2 $4,700
322 2/8 400
323 2/12 2,500
324 2/19 2.200
325 2/27 200
326 2/28 700
327 2/28 1,900
$12,600
Balance on February 1 $6,800
Receipts 13,900
Disbursements (12,600)
Balance on February 28 $8,100
Information from February's bank statement and company records reveal the following additional information:
a. The ending cash balance recorded in the bank statement is $13,145.
b. Cash receipts of $1,600 from 2/26-2/28 are outstanding.
c. Checks 325 and 327 are outstanding.
d. The deposit on 2/11 includes a customer's check for $200 that did not clear the bank.
e. Check 323 was written for $2,800 for advertising in February. The bank properly recorded the check for this amount.
f. An automatic withdrawal for Oscar's February rent was made on February 4 for $1,100.
Required:
a. Prepare a bank reconciliation for Oscar?s checking account on February 28, 2018.
b. Record the necessary cash adjustments.
Date Amount
Deposits: 2/4 $2,700
2/11 2,300
2/18 3,200
2/25 4,100
Cash receipts: 2/26-2/28 1,600
$13,900
Checks
No. Date Amount
321 2/2 $4,700
322 2/8 400
323 2/12 2,500
324 2/19 2.200
325 2/27 200
326 2/28 700
327 2/28 1,900
$12,600
Balance on February 1 $6,800
Receipts 13,900
Disbursements (12,600)
Balance on February 28 $8,100
Information from February's bank statement and company records reveal the following additional information:
a. The ending cash balance recorded in the bank statement is $13,145.
b. Cash receipts of $1,600 from 2/26-2/28 are outstanding.
c. Checks 325 and 327 are outstanding.
d. The deposit on 2/11 includes a customer's check for $200 that did not clear the bank.
e. Check 323 was written for $2,800 for advertising in February. The bank properly recorded the check for this amount.
f. An automatic withdrawal for Oscar's February rent was made on February 4 for $1,100.
Required:
a. Prepare a bank reconciliation for Oscar?s checking account on February 28, 2018.
b. Record the necessary cash adjustments.
1 answer:
Answer:
Some part of this question is missing (refer to attachment for missing part of question)
A bank Reconciliation statement is required to agree the Cash Ledger of the Business. Differences are highlighted and subjected to test to understand and justify their existence. It is with a Bank reconciliation statement we can be sure the transactions posted in our Cash Book and Bank records are accurate.
An adjusted Cash Book may need to be drawn up to capture activities in the Bank that was not known to the Treasury Analyst.
Having done this, both the Bank reconciliation should agree with the adjusted Cash Book.
Explanation:
<u></u>
<u>Red Carpet Store</u>
<u>Bank reconciliation Statement</u>
<u>For the Month ending February 28, 2018</u>
<u></u>
Balance per Bank statement $13,325
Add Cash Receipts 26-28 Feb not recorded $1,600
Deduct Undebited Cheques
- 325 = $200
- 327 = $1,900
- Total undebited Cheque = -$2100
Balance as per adjusted Cash Book $12,825
<u>Adjusted Cash Book</u>
<u>As at February 28 2018</u>
Opening Balance $8,100
Deduct uncleared cheque -$200
Deduct Under-recording of Chq 323 -$300
Deduct Feb rent automatic withdrawal -$1,100
Add Interest earned on daily balance $200
Add Repayment of Titanic Loan & interest &6,250
Deduct charges (NSF, Titanic repayment & Automatic rent payment) -$125
Adjusted cash balance = $12,825
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