PROBLEM 7-3AUsing the bank reconciliation as a control device
The cash receipts and the cash payments of Veralux Interiors for March 20X5 follow:
Cash Receipts Cash Payments
(Posting reference is CR)(Posting reference is CP)
DateCash DebitCheque No.Cash Credit
March4$ 2,7161413$1,465
954414141,004
111,6551415450
1489614168
173671417775
25890141888
312,03814194,126
Total$ 9,1061420970
1421200
14222,267
Total$11,353
The Cash account of Veralux Interiors shows the following information on 31 March, 20X5:
Cash
Journal
DateItemReferenceDebitCreditBalance
March1Balance12,188
31CR. 109,10621,294
31CP. 1611,3539,941
PROBLEM 7-3A
Continued
On March 31, 20X5, Veralux Interiors received this bank statement:
BankStatement forMarch 20X5
Beginning balance$12,188
Deposits and other Credits:
March1$625EFT
52,716
10544
111,655
15896
18367
25890
311,000BC8,693
Cheques and other Debits:
March8$441DC
91,465
131,004
14450
158
19340EFT
22775
2988
314,216
3125SC(8,812)
Ending Balance$12,069
Explanation:BCbank collection
EFTelectronic funds transfer
DCdishonoured cheque
SCservice charge.
Additional data for the bank reconciliation:
a.The EFT deposit was a receipt of rent. The EFT debit was payment of insurance.
b.The dishonoured cheque was received late in February from Mark Anthony.
c.The $1,000 bank collection of a note receivable on 31 March included $122 interest revenue.
PROBLEM 7-3A
Continued
d.The correct amount of cheque number 1419, a payment on account, is $4,216. (The Veralux Interiors accountant mistakenly recorded the cheque for $4,126.)
Required:
1.Prepare the bank reconciliation of Veralux Interiors at March 31, 20X5.
2.Describe how a bank account and the bank reconciliation help Veralux managers control the business’s cash.
Instructions:
1.Review the printed template called Problem 7-3A that follows these instructions. Most of the problem data have been entered for you in the data input section of the spreadsheet.
Enter the amounts and titles where indicated.
2.There is 1 FORMULA in the template that you need to provide to complete your analysis. Using the space provided below, write the formula where requested in the template.
FORMULA1______
- Click the Excel icon from the program manager screen to start the spreadsheet program. Click on Open Fileto retrieve the template for the problem. Enter the missing amounts and titles in the appropriate cells on the template. Then enter the 1 FORMULA where indicated on the template.
Type the answer where indicated.
4.Click the Save FileButton to save your work.
5.Click the Print Button to print your work.