You are auditing general cash for the Tampa Supply Company for the fiscal year ended March 31, 2019. The client has not prepared the March 31 bank reconciliation. After a brief discussion with the owner, you agree to prepare the reconciliation, with assistance from one of Tampa Supply's clerks. General Ledger Bank Statement Beginning balance 3/1/19 7,637 9,513 Deposits 25,336 Cash receipts journal 26,512 Checks cleared (25,629) Cash disbursements journal (23,824) March bank service charge (75) Note paid directly (4,500) NSF check (2,071) Ending balance 3/31/19 10,325 2,574 Balance per bank 9,513 Deposits in transit 620 Outstanding checks 2,496 Balance per books 7,637 1. Checks clearing that were outstanding on February 28 totaled $2,477. 2. Checks clearing that were recorded in the Marchdisbursements journal totaled $21,205. 3. Deposits included $620 from February and $24,801 for March. 4. A check for $1,280cleared the bank but had not been recorded in the cash disbursements journal. It was for an acquisition of inventory. Tampa Supply uses the periodic-inventory method. 5. A check for $667was charged to Tampa Supply but had been written on a different company's bank account. 6. The bank charged TampaSupply's account for a nonsufficient funds check totaling $2,071. The credit manager concluded that the customer intentionally closed its account and the owner left the city. The check was turned over to a collection agency. 7. A note for $4,000,plus interest, was paid directly to the bank under an agreement signed four months ago. The note payable was recorded at $4,000 on Tampa Supply's books. a. Prepare a bank reconciliation that shows both the unadjusted and adjusted balance per books. b. Prepare all adjusting entries. c. What audit procedures would you use to verify each item in the bank reconciliation?

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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You are auditing general cash for the Tampa Supply Company for the fiscal year ended March 31, 2019. The client has not prepared the March 31 bank reconciliation. After a brief discussion with the owner, you agree to prepare the reconciliation, with assistance from one of Tampa Supply's clerks.

	General Ledger	Bank Statement
Beginning balance 3/1/19	7,637	9,513
Deposits		25,336
Cash receipts journal	26,512
Checks cleared		(25,629)
Cash disbursements journal	(23,824)
March bank service charge		(75)
Note paid directly		(4,500)
NSF check		(2,071)
Ending balance 3/31/19	10,325	2,574

Balance per bank	9,513
Deposits in transit	620
Outstanding checks	2,496
Balance per books	7,637

1.	Checks clearing that were outstanding on February 28 totaled $2,477.
2.	Checks clearing that were recorded in the Marchdisbursements journal totaled $21,205.
3.	Deposits included $620 from February and $24,801 for March.
4.	A check for $1,280cleared the bank but had not been recorded in the cash disbursements journal. It was for an acquisition of inventory. Tampa Supply uses the periodic-inventory method.
5.	A check for $667was charged to Tampa Supply but had been written on a different company's bank account.
6.	The bank charged TampaSupply's account for a nonsufficient funds check totaling $2,071. The credit manager concluded that the customer intentionally closed its account and the owner left the city. The check was turned over to a collection agency.
7.	A note for $4,000,plus interest, was paid directly to the bank under an agreement signed four months ago. The note payable was recorded at $4,000 on Tampa Supply's books.

a.	Prepare a bank reconciliation that shows both the unadjusted and adjusted balance per books.
b.	Prepare all adjusting entries.
c.	What audit procedures would you use to verify each item in the bank reconciliation?
d.	What is the cash balance that should appear on the March31, 2019, financial statements?

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