The bank statement for the checking account of Management Systems Inc. (MSI) showed a December 31, 2018, balance of $14,832.62. Information that might be useful in preparing a bank reconciliation is as follows: Outstanding checks were $1,340.55. The December 31, 2018, cash receipts of $585 were not deposited in the bank until January 2, 2019. One check written in payment of rent for $248 was correctly recorded by the bank but was recorded by MSI as a $284 disbursement. In accordance with prior authorization, the bank withdrew $470 directly from the checking account as payment on a mortgage note payable. The interest portion of that payment was $360. MSI has made no entry to record the automatic payment. Bank service charges of $16 were listed on the bank statement. A deposit of $885 was recorded by the bank on December 13, but it did not belong to MSI. The deposit should have been made to the checking account of MIS, Inc. The bank statement included a charge of $85 for an NSF check. The check was returned with the bank statement and the company will seek payment from the customer. MSI maintains a $220 petty cash fund that was appropriately reimbursed at the end of December. According to instructions from MSI on December 30, the bank withdrew $11,000 from the account and purchased U.S. Treasury bills for MSI. MSI recorded the transaction in its books on December 31 when it received notice from the bank. Half of the Treasury bills mature in two months and the other half in six months. Required: 1. Compute a bank reconciliation for the MSI checking account at December 31, 2018. You will have to compute the balance per books. 2. Compute any necessary adjusting journal entries indicated. 3. What amount would MSI report as cash and cash equivalents in the current asset section of the December 31, 2018, balance sheet? 4.Compute any necessary adjusting journal entries indicated. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 5.What amount would MSI report as cash and cash equivalents in the current asset section of the December 31, 2018, balance sheet? (Round your answer to 2 decimal places.)

The bank statement for the checking account of Management Systems Inc. (MSI) showed a December 31, 2018, balance of $14,832.62. Information that might be useful in preparing a bank reconciliation is as follows: Outstanding checks were $1,340.55. The December 31, 2018, cash receipts of $585 were not deposited in the bank until January 2, 2019. One check written in payment of rent for $248 was correctly recorded by the bank but was recorded by MSI as a $284 disbursement. In accordance with prior authorization, the bank withdrew $470 directly from the checking account as payment on a mortgage note payable. The interest portion of that payment was $360. MSI has made no entry to record the automatic payment. Bank service charges of $16 were listed on the bank statement. A deposit of $885 was recorded by the bank on December 13, but it did not belong to MSI. The deposit should have been made to the checking account of MIS, Inc. The bank statement included a charge of $85 for an NSF check. The check was returned with the bank statement and the company will seek payment from the customer. MSI maintains a $220 petty cash fund that was appropriately reimbursed at the end of December. According to instructions from MSI on December 30, the bank withdrew $11,000 from the account and purchased U.S. Treasury bills for MSI. MSI recorded the transaction in its books on December 31 when it received notice from the bank. Half of the Treasury bills mature in two months and the other half in six months. Required: 1. Compute a bank reconciliation for the MSI checking account at December 31, 2018. You will have to compute the balance per books. 2. Compute any necessary adjusting journal entries indicated. 3. What amount would MSI report as cash and cash equivalents in the current asset section of the December 31, 2018, balance sheet? 4.Compute any necessary adjusting journal entries indicated. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 5.What amount would MSI report as cash and cash equivalents in the current asset section of the December 31, 2018, balance sheet? (Round your answer to 2 decimal places.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Outstanding checks were $1,340.55.
The December 31, 2018, cash receipts of $585 were not deposited in the bank until January 2, 2019.
One check written in payment of rent for $248 was correctly recorded by the bank but was recorded by MSI as a $284 disbursement.
In accordance with prior authorization, the bank withdrew $470 directly from the checking account as payment on a mortgage note payable. The interest portion of that payment was $360. MSI has made no entry to record the automatic payment.
Bank service charges of $16 were listed on the bank statement.
A deposit of $885 was recorded by the bank on December 13, but it did not belong to MSI. The deposit should have been made to the checking account of MIS, Inc.
The bank statement included a charge of $85 for an NSF check. The check was returned with the bank statement and the company will seek payment from the customer.
MSI maintains a $220 petty cash fund that was appropriately reimbursed at the end of December.
According to instructions from MSI on December 30, the bank withdrew $11,000 from the account and purchased U.S. Treasury bills for MSI. MSI recorded the transaction in its books on December 31 when it received notice from the bank. Half of the Treasury bills mature in two months and the other half in six months.

Required:

1. Compute a bank reconciliation for the MSI checking account at December 31, 2018. You will have to compute the balance per books.

2. Compute any necessary adjusting journal entries indicated.

3. What amount would MSI report as cash and cash equivalents in the current asset section of the December 31, 2018, balance sheet?

4.Compute any necessary adjusting journal entries indicated. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

5.What amount would MSI report as cash and cash equivalents in the current asset section of the December 31, 2018, balance sheet? (Round your answer to 2 decimal places.)

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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