Sunland Company is a very profitable small business. It has not, however, given much consideration to internal control. For example, in an attempt to keep clerical and office expenses to a minimum, the company has combined the jobs of cashier and bookkeeper. As a result, Bret Turrin handles all cash receipts, keeps the accounting records, and prepares the monthly bank reconciliations. The balance per the bank statement on October 31, 2022, was $17,760. Outstanding checks were No. 62 for $150.10, No. 183 for $199, No. 284 for $282.75, No. 862 for $211.40, No. 863 for $230, and No. 864 for $184.80. Included with the statement was a credit memorandum of $176.20 indicating the collection of a note receivable for Sunland Company by the bank on October 25. This memorandum has not been recorded by Sunland. The company's ledger showed one Cash account with a balance of $21.990.00. The balance included undeposited cash on hand. Because of the lack of internal controls, Bret took for personal use all of the undeposited receipts in excess of $4,580.00. He then prepared the following bank reconciliation in an effort to conceal his theft of cash. Cash balance per books, October 31 Add: Outstanding checks No.862 No. 863 No. 864 Less: Undeposited receipts Unadjusted balance per bank, October 31 Less: Bank credit memorand randum Cash balance per bank statement, October 31 $211.40 230 184.80 $21.990.00 526.20 22.516.20 4.580.00 17,936.20 176.20 $17,760.00 Prepare a correct bank reconciliation. (Hint: Deduct the amount of the theft from the adjusted balance per books) (Round answers to 2 decimal places, eg. 52.75. List items that increase cash balance first) SUNLAND COMPANY Bank Reconciliation
Sunland Company is a very profitable small business. It has not, however, given much consideration to internal control. For example, in an attempt to keep clerical and office expenses to a minimum, the company has combined the jobs of cashier and bookkeeper. As a result, Bret Turrin handles all cash receipts, keeps the accounting records, and prepares the monthly bank reconciliations. The balance per the bank statement on October 31, 2022, was $17,760. Outstanding checks were No. 62 for $150.10, No. 183 for $199, No. 284 for $282.75, No. 862 for $211.40, No. 863 for $230, and No. 864 for $184.80. Included with the statement was a credit memorandum of $176.20 indicating the collection of a note receivable for Sunland Company by the bank on October 25. This memorandum has not been recorded by Sunland. The company's ledger showed one Cash account with a balance of $21.990.00. The balance included undeposited cash on hand. Because of the lack of internal controls, Bret took for personal use all of the undeposited receipts in excess of $4,580.00. He then prepared the following bank reconciliation in an effort to conceal his theft of cash. Cash balance per books, October 31 Add: Outstanding checks No.862 No. 863 No. 864 Less: Undeposited receipts Unadjusted balance per bank, October 31 Less: Bank credit memorand randum Cash balance per bank statement, October 31 $211.40 230 184.80 $21.990.00 526.20 22.516.20 4.580.00 17,936.20 176.20 $17,760.00 Prepare a correct bank reconciliation. (Hint: Deduct the amount of the theft from the adjusted balance per books) (Round answers to 2 decimal places, eg. 52.75. List items that increase cash balance first) SUNLAND COMPANY Bank Reconciliation
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sunland Company is a very profitable small business. It has not, however, given much consideration to internal control. For example, in
an attempt to keep clerical and office expenses to a minimum, the company has combined the jobs of cashier and bookkeeper. As a
result, Bret Turrin handles all cash receipts, keeps the accounting records, and prepares the monthly bank reconciliations.
The balance per the bank statement on October 31, 2022, was $17,760. Outstanding checks were No. 62 for $150.10, No. 183 for
$199, No. 284 for $282.75, No. 862 for $211.40, No. 863 for $230, and No. 864 for $184.80. Included with the statement was a credit
memorandum of $176.20 indicating the collection of a note receivable for Sunland Company by the bank on October 25. This
memorandum has not been recorded by Sunland.
The company's ledger showed one Cash account with a balance of $21,990.00. The balance included undeposited cash on hand.
Because of the lack of internal controls, Bret took for personal use all of the undeposited receipts in excess of $4,580.00. He then
prepared the following bank reconciliation in an effort to conceal his theft of cash.
Cash balance per books, October 31
Add: Outstanding checks
No. 862
No. 863
No. 864
Less: Undeposited receipts
Unadjusted balance per bank, October 31
Less: Bank credit memorandum
Cash balance per bank statement, October 31
$211.40
>
230
184.80
$21,990.00
526.20
22,516.20
4,580.00
17,936.20
176.20
$17,760.00
(a)
Prepare a correct bank reconciliation. (Hint: Deduct the amount of the theft from the adjusted balance per books.) (Round answers to 2
decimal places, eg. 52.75. List items that increase cash balance first.)
SUNLAND COMPANY
Bank Reconciliation
$
$
$
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