Computing Outstanding Checks and Deposits in Transit and Preparing a Bank Reconciliation and Journal Entries – The December 31, 2011, bank statement for Rivas Company and the December 2011 ledger accounts for cash follow.
|
BANK STATEMENT |
|||
|
Date |
Checks |
Deposits |
Balance |
|
Dec. 1 |
$48,000 |
||
|
2 |
$400; 300 |
$17,000 |
64,300 |
|
4 |
7,000; 90 |
57,210 |
|
|
6 |
120; 180; 1,600 |
55,310 |
|
|
11 |
500; 1,200; 70 |
28,000 |
81,540 |
|
13 |
480; 700; 1,900 |
78,460 |
|
|
17 |
12,000; 8,000 |
58,460 |
|
|
23 |
60; 23,500 |
36,000 |
70,900 |
|
26 |
900; 2,650 |
67,350 |
|
|
28 |
2,200; 5,200 |
59,950 |
|
|
30 |
17,000; 1,890; 300* |
19,000 |
59,760 |
|
31 |
1,650; 1,350; 150† |
5,250‡ |
61,860 |
|
Cash (A) |
|||||
|
Dec. 1 |
Balance |
64,100 |
Checks |
written during |
December: |
|
Deposits |
60 |
5,000 |
2,650 |
||
|
Dec. 11 |
28,000 |
17,000 |
5,200 |
1,650 |
|
|
23 |
36,000 |
700 |
1,890 |
2,200 |
|
|
30 |
19,000 |
3,500 |
1,600 |
7,000 |
|
|
31 |
13,000 |
1,350 |
120 |
300 |
|
|
180 |
90 |
480 |
|||
|
12,000 |
23,500 |
8,000 |
|||
|
70 |
500 |
1,900 |
|||
|
900 |
1,200 |
||||
The November 2011 bank reconciliation showed the following: correct cash balance at November 30, $64,100; deposits in transit on November 30, $17,000; and outstanding checks on November 30, $400 + $500 = $900.
Required:
1. Compute the deposits in transit December 31, 2011, by comparing the deposits on the bank statement to the deposits listed on the cash ledger account and the list of deposits in transit at the end of November.
2. Compute the outstanding checks at December 31, 2011, by comparing the checks listed on the bank statement with those on the cash ledger account and the list of outstanding checks at the end of November.
3. Prepare a bank reconciliation at December 31, 2011.
4. Give any journal entries that should be made as a result of the bank reconciliation made by the company. Why are they necessary?
5. What total amount of cash should be reported on the December 31, 2011, balance sheet?