The Cash account of Lyco Corporation showed a balance of $21,749 at December 31 prior to preparing a bank reconciliation. The company's bank statement showed a balance of $22,000 at the same date. The only reconciling items consisted of: (1) a $5,000 deposit in transit, (2) a bank service charge of $200, (3) outstanding checks totaling $9,000, (4) a $3,000 check marked NSF from Susque Company, one of Lyco's customers, and (5) a check written for office supplies in the amount of $1,832 that was incorrectly recorded by the company's bookkeeper as an increase in Office Supplies of $1,283, and a reduction in Cash of $1,283. In addition to this information, Lyco owned the following financial assets at December 31: (1) a money market account of $60,000, (2) $3,000 of high-grade, 120-day commercial paper, and (3) $5,000 of highly liquid stock investments. a. Prepare the company's December 31 bank reconciliation. b. Determine the amount at which cash and cash equivalents will be reported in the company's balance sheet dated December 31. c. Prepare the necessary journal entry to update the accounting records.
The Cash account of Lyco Corporation showed a balance of $21,749 at December 31 prior to preparing a bank reconciliation. The company's bank statement showed a balance of $22,000 at the same date. The only reconciling items consisted of: (1) a $5,000 deposit in transit, (2) a bank service charge of $200, (3) outstanding checks totaling $9,000, (4) a $3,000 check marked NSF from Susque Company, one of Lyco's customers, and (5) a check written for office supplies in the amount of $1,832 that was incorrectly recorded by the company's bookkeeper as an increase in Office Supplies of $1,283, and a reduction in Cash of $1,283. In addition to this information, Lyco owned the following financial assets at December 31: (1) a money market account of $60,000, (2) $3,000 of high-grade, 120-day commercial paper, and (3) $5,000 of highly liquid stock investments. a. Prepare the company's December 31 bank reconciliation. b. Determine the amount at which cash and cash equivalents will be reported in the company's balance sheet dated December 31. c. Prepare the necessary journal entry to update the accounting records.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:The Cash account of Lyco Corporation showed a balance of $21,749 at December 31 prior to preparing a bank reconciliation. The
company's bank statement showed a balance of $22,000 at the same date. The only reconciling items consisted of: (1) a $5,000
deposit in transit, (2) a bank service charge of $200, (3) outstanding checks totaling $9,000, (4) a $3,000 check marked NSF from
Susque Company, one of Lyco's customers, and (5) a check written for office supplies in the amount of $1,832 that was incorrectly
recorded by the company's bookkeeper as an increase in Office Supplies of $1,283, and a reduction in Cash of $1,283,
In addition to this information, Lyco owned the following financial assets at December 31: (1) a money market account of $60,000, (2)
$3,000 of high-grade, 120-day commercial paper, and (3) $5,000 of highly liquid stock investments.
a. Prepare the company's December 31 bank reconciliation.
b. Determine the amount at which cash and cash equivalents will be reported in the company's balance sheet dated December 31.
c. Prepare the necessary journal entry to update the accounting records.
Complete this question by entering your answers in the table below.
Required B Required C
Prepare the company's December 31 bank reconciliation.
Required A
Cash balance per Lyco records
Adjusted cash balance, December 31
Cash balance per bank statement
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