Reynolds's Red Carpet Store maintains a checking account with Academy Bank. Reynolds's sells carpet each day but makes bar deposits only once per week. The following provides information from the company's cash ledger for the month ending Februa 2024. Deposits: Cash receipts: Date 2/4 2/11 2/18 2/25 2/26- 2/28 Amount $2,550 2,150 3,050 3,950 1,450 $13,150 Checks: Number 323 324 325 326 327 Date 2/12 2/19 a. The ending cash balance recorded in the bank statement is $11,685. b. Cash receipts of $1,450 from 2/26-2/28 are outstanding. c. Checks 325 and 327 are outstanding. 2/27 2/28 2/28 Amount $6,650 Balance on February 1 Receipts 13,150 Disbursements (7.450) $12,350 Balance on February 28 Information from February's bank statement and company records reveals the following additional information: Amount $2,350 2,050 400 900 1,750 $7,450 d. The deposit on 2/11 includes a customer's check for $400 that did not clear the bank (NSF check). e. Check 323 was written for $2,800 for advertising in February. The bank properly recorded the check for this amount. t. An EFT withdrawal for Reynolds's February rent was made on February 4 for $1,100. g. Debit card transactions include $4,780 for legal fees expense and $400 for entertainment expense. h. In January, one of Reynolds's suppliers, Titanic Fabrics, borrowed $5,700 from Reynolds. On February 24, Titanic paid $5,950 ($5.700 borrowed amount plus $250 interest) directly to Academy Bank in payment for January's borrowing. L. Academy Bank charged service fees of $185 to Reynolds's for the month. Required: 1. Prepare a bank reconciliation for Reynolds's checking account on February 28, 2024.
Reynolds's Red Carpet Store maintains a checking account with Academy Bank. Reynolds's sells carpet each day but makes bar deposits only once per week. The following provides information from the company's cash ledger for the month ending Februa 2024. Deposits: Cash receipts: Date 2/4 2/11 2/18 2/25 2/26- 2/28 Amount $2,550 2,150 3,050 3,950 1,450 $13,150 Checks: Number 323 324 325 326 327 Date 2/12 2/19 a. The ending cash balance recorded in the bank statement is $11,685. b. Cash receipts of $1,450 from 2/26-2/28 are outstanding. c. Checks 325 and 327 are outstanding. 2/27 2/28 2/28 Amount $6,650 Balance on February 1 Receipts 13,150 Disbursements (7.450) $12,350 Balance on February 28 Information from February's bank statement and company records reveals the following additional information: Amount $2,350 2,050 400 900 1,750 $7,450 d. The deposit on 2/11 includes a customer's check for $400 that did not clear the bank (NSF check). e. Check 323 was written for $2,800 for advertising in February. The bank properly recorded the check for this amount. t. An EFT withdrawal for Reynolds's February rent was made on February 4 for $1,100. g. Debit card transactions include $4,780 for legal fees expense and $400 for entertainment expense. h. In January, one of Reynolds's suppliers, Titanic Fabrics, borrowed $5,700 from Reynolds. On February 24, Titanic paid $5,950 ($5.700 borrowed amount plus $250 interest) directly to Academy Bank in payment for January's borrowing. L. Academy Bank charged service fees of $185 to Reynolds's for the month. Required: 1. Prepare a bank reconciliation for Reynolds's checking account on February 28, 2024.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Reynolds's Red Carpet Store maintains a checking account with Academy Bank. Reynolds's sells carpet each day but makes bank
deposits only once per week. The following provides information from the company's cash ledger for the month ending February 28,
2024.
Deposits:
Cash
receipts:
Date
2/4
2/11
2/18
2/25
2/26-
2/28
Balance on February 11
Receipts
Disbursements
Balance on February 28
Amount
$2,550
2,150
3,050
3,950
1,450
$13,150
Amount
$6,650
13,150
(7.450)
$12,350
Checks:
Number
323
324
325
326
327
Date
2/12
2/19
2/27
2/28
2/28
a. The ending cash balance recorded in the bank statement is $11,685.
b. Cash receipts of $1,450 from 2/26-2/28 are outstanding.
c. Checks 325 and 327 are outstanding.
Amount
$2,350
2,050
Information from February's bank statement and company records reveals the following additional information:
400
900
1,750
$7,450
d. The deposit on 2/11 includes a customer's check for $400 that did not clear the bank (NSF check).
e. Check 323 was written for $2.800 for advertising in February. The bank properly recorded the check for this amount.
Required:
1. Prepare a bank reconciliation for Reynolds's checking account on February 28, 2024.
2. Record the necessary cash adjustments.
f. An EFT withdrawal for Reynolds's February rent was made on February 4 for $1,100.
g. Debit card transactions include $4,780 for legal fees expense and $400 for entertainment expense.
h. In January, one of Reynolds's suppliers, Titanic Fabrics, borrowed $5,700 from Reynolds. On February 24, Titanic paid $5,950
($5.700 borrowed amount plus $250 interest) directly to Academy Bank in payment for January's borrowing.
I. Academy Bank charged service fees of $185 to Reynolds's for the month.
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