Bank statement as a control over Cash: A bank statement is a record of all transactions affecting the bank account of the company. The goal of using bank statement as a control over cash is to ascertain differences in recording of transactions in the cash account by the company with those recorded by the bank. Two factors responsible for difference in balance of cash in the company with the bank statement balance .

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Information pertaining to Noskey Corporation’s sales revenue follows: November 20X1 (Actual) December 20X1 (Budgeted) January 20X2 (Budgeted)Cash sales $ 115,000 $ 121,000 $ 74,000Credit sales 282,000 409,000 208,000Total sales $ 397,000 $ 530,000 $ 282,000Management estimates 5% of credit sales to be uncollectible. Of collectible credit sales, 60% is collected in the month of sale and the remainder in the month following the month of sale. Purchases of inventory each month include 70% of the next month’s projected total sales (stated at cost) plus 30% of projected sales for the current month (stated at cost). All inventory purchases are on account; 25% is paid in the month of purchase, and the remainder is paid in…

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Chapter 5, Problem 13CDQ

To determine

Introduction:

Bank statement as a control over Cash:

A bank statement is a record of all transactions affecting the bank account of the company. The goal of using bank statement as a control over cash is to ascertain differences in recording of transactions in the cash account by the company with those recorded by the bank.

Two factors responsible for difference in balance of cash in the company with the bank statement balance.

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Information pertaining to Noskey Corporation’s sales revenue follows: November 20X1 (Actual) December 20X1 (Budgeted) January 20X2 (Budgeted)Cash sales $ 115,000 $ 121,000 $ 74,000Credit sales 282,000 409,000 208,000Total sales $ 397,000 $ 530,000 $ 282,000Management estimates 5% of credit sales to be uncollectible. Of collectible credit sales, 60% is collected in the month of sale and the remainder in the month following the month of sale. Purchases of inventory each month include 70% of the next month’s projected total sales (stated at cost) plus 30% of projected sales for the current month (stated at cost). All inventory purchases are on account; 25% is paid in the month of purchase, and the remainder is paid in…

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