Acct 422 Homework 6 Solutions

ACCT 422 Homework 6 Solutions

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ACCT 422 Homework 6 Solutions

1. You are auditing general cash for a company for the fiscal year ended September 30, 2014. The client has not prepared the September 30 bank reconciliation,. After a brief discussion with the owner, you agree to prepare the reconciliation with the assistance from one the company’s clerks. You obtain the following information: (30 points)

General Ledger Bank Statement

Beginning balance 9/1/14 $15,000 $17,800

Deposits $31,051

Cash receipts journal $33,330

Check cleared (30,309)

Cash disbursements journal ($27,101)

September bank service charge (150)

Note paid directly (8,000)

NSF check (950)

Ending balance 9/30/14 $21,229 $9,442

August 30 Bank Reconciliation

Information in General ledger and bank statement

Balance per bank $17,800

Deposit in transit 1,200

Outstanding check 4,000

Balance per book $15,000

Additional information obtained is as follows:

1. Check clearing that were outstanding on August 30 total $3,820

2. Check clearing that were recorded in the September disbursement journal total $25,239

3. A check for $500 cleared the bank but had not been recorded in the cash disbursements journal. It was for an acquisition for inventory. The company uses the periodic-inventory method.

4. A check for $750 was charged to the company but had been written on a different company’s bank account.

5. Deposit included $1,200 from August and $29,851 for September.

6. The bank charged the company account for nonsufficient check totaling $950. The credit manager concluded that customer intentionally closed its account and the owner left the city. The check was turned over to collection agency.

7. A note for $7,500, plus interest was paid directly to the bank under an agreement singed five month ago. The note payable was recorded at $ 7,500 on the company’s books.

Required:

1. Prepared a bank...