Use the following to answer questions 1-4 Determine whether the firm reports each of the following items as part of cash, cash equivalents, or neither in the balance sheet. Item 1 2 3 60-day US Treasury Bill 4. 6-month Certificate of deposit Supplies Currency Use the following to answer questions 5-8 Bank Reconciliation: Identify whether the item should be added or subtracted from the bank balance or the company balance. Use the number (1-4) for your response. For instance, if the amount should be added to bank statement balance you would input 1. 1. Added to bank statement balance 2. Subtracted from bank statement balance 3. Added to company cash balance 4. Subtracted from company cash balance 5 6 7 8 Item Bank error, cleared the same deposit twice NSF Cash, Cash equivalent, or neither Checks outstanding Interest earned Use the following to answer questions 9-11 On February 28th, the general ledger of the company shows a balance for cash of $100,000. Cash receipts yet to be deposited into the checking account total $20,000, while checks written by the company but not yet processed by the bank total $45,000. The company's balance of cash does not reflect a NSF check of $1,000, a service fee of $75 and interest earned of $20 and a customer payments collected by the bank of $3,000; however, these amounts are included in the balance of cash of $126,945 reported by the bank as of the end of February. Answer the following based on the process of doing the bank reconciliation: 9. $__ _Determine the total amount that is used to reconcile the Bank balance (include "-" if needed): 10. $ Determine the total amount that is used to reconcile the Company cash balance (include "-" if needed) 11. $ What is the balance in the company's cash account after the reconciliation?
Use the following to answer questions 1-4 Determine whether the firm reports each of the following items as part of cash, cash equivalents, or neither in the balance sheet. Item 1 2 3 60-day US Treasury Bill 4. 6-month Certificate of deposit Supplies Currency Use the following to answer questions 5-8 Bank Reconciliation: Identify whether the item should be added or subtracted from the bank balance or the company balance. Use the number (1-4) for your response. For instance, if the amount should be added to bank statement balance you would input 1. 1. Added to bank statement balance 2. Subtracted from bank statement balance 3. Added to company cash balance 4. Subtracted from company cash balance 5 6 7 8 Item Bank error, cleared the same deposit twice NSF Cash, Cash equivalent, or neither Checks outstanding Interest earned Use the following to answer questions 9-11 On February 28th, the general ledger of the company shows a balance for cash of $100,000. Cash receipts yet to be deposited into the checking account total $20,000, while checks written by the company but not yet processed by the bank total $45,000. The company's balance of cash does not reflect a NSF check of $1,000, a service fee of $75 and interest earned of $20 and a customer payments collected by the bank of $3,000; however, these amounts are included in the balance of cash of $126,945 reported by the bank as of the end of February. Answer the following based on the process of doing the bank reconciliation: 9. $__ _Determine the total amount that is used to reconcile the Bank balance (include "-" if needed): 10. $ Determine the total amount that is used to reconcile the Company cash balance (include "-" if needed) 11. $ What is the balance in the company's cash account after the reconciliation?
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter6: Cash And Internal Control
Section: Chapter Questions
Problem 6.4MCP
Related questions
Question
Transcribed Image Text:**Title: Understanding Cash and Bank Reconciliation in Financial Statements**
**Instructions:**
Please submit your answers in CANVAS before it’s due.
**Section 1: Cash and Cash Equivalents**
**Instructions:**
Determine whether the firm reports each of the following items as part of cash, cash equivalents, or neither in the balance sheet.
**Table 1: Classification of Financial Items**
| Item | Cash, Cash equivalent, or neither |
|--------------------------------------|-----------------------------------|
| 1. Supplies | |
| 2. Currency | |
| 3. 60-day US Treasury Bill | |
| 4. 6-month Certificate of deposit | |
---
**Section 2: Bank Reconciliation**
**Instructions:**
Identify whether the item should be added or subtracted from the bank balance or the company cash balance. Use the number (1-4) for your response. For example, if the amount should be added to bank statement balance you would input 1.
1. Added to bank statement balance
2. Subtracted from bank statement balance
3. Added to company cash balance
4. Subtracted from company cash balance
**Table 2: Reconciliation Items**
| Item | # |
|---------------------------------------------------------|---|
| 5. Bank error, cleared the same deposit twice | |
| 6. NSF (Non-Sufficient Funds) | |
| 7. Checks outstanding | |
| 8. Interest earned | |
---
**Section 3: Bank Reconciliation Process**
**Instructions:**
Use the following information to answer questions 9-11.
**Scenario:**
On February 28th, the general ledger of the company shows a balance for cash of $100,000. Cash receipts yet to be deposited into the checking account total $20,000, while checks written by the company but not yet processed by the bank total $45,000. The company’s balance of cash does not reflect a NSF check of $1,000, a service fee of $75 and interest earned of $20 and a customer payments collected by the bank of $3,000; however, these amounts are included in the balance of cash of $126,945 reported by the bank as of the end of February.
**Questions:**
9. **Total Amount for Bank Balance Reconciliation:**
Determine the total amount that is used
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