DIRE DAWA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING AND FINANCE
FUNDAMENTAL OF ACCOUNTING I
WORKSHEET ON CHAPTER 4 CASH

PROBLEM 4-1 BANK RECONCILIATION AND ENTRIES

The cash account for Shalla Company at February 28, 2014, indicated a balance of Br 19,144.15. The bank
statement indicated a balance of Br 31,391.40 on February 28, 2014. Comparing the bank statement and
the accompanying canceled checks and memorandums with the records reveal the following reconciling
items:
a) Checks outstanding totaled Br 11,021.50.
b) A deposit of Br 6,215.50, representing receipts of February 28, had been made too late to appear on
the bank statement.
c) The bank had collected Br 6,300 on a note left for collection. The face of the note was Br 6,000.
d) A check for Br 1,275 returned with the statement had been incorrectly recorded by Shalla Company as
Br 2,175. The check was for the payment of an obligation to Wow Co. for the purchase of office
supplies on account.
e) A check drawn for Br 855 had been incorrectly charged by the bank as Br 585.
f) Bank service charges for February amounted to Br 28.75.
Instructions
1) Prepare a bank reconciliation.
2) Journalize the necessary entries.

PROBLEM 4-2 BANK RECONCILIATION AND ENTRIES

The cash account for Nice Company on April 1, 2014, indicated a balance of Br 16,911.95. During April,
the total cash deposited was Br 65,500.40, and checks written totaled Br 68,127.47. The bank statement
indicated a balance of Br 18,880.45 on April 30, 2014. Comparing the bank statement, the canceled
checks, and the accompanying memorandums with the records revealed the following reconciling items:
a) Checks outstanding totaled Br 5,180.27.
b) A deposit of Br 3,481.70, representing receipts of April 30, had been made too late to appear on the
bank statement.
c) A check for Br 620 had been incorrectly charged by the bank as Br 260.
d) A check for Br 479.30 returned with the statement had been recorded by Nice Company as Br 497.30.
The check was for the payment of an obligation to Sunrise Company on account.
e) The bank had collected for Nice Company Br 3,424 on a note left for collection. The face of the note
was Br 3,200.
f) Bank service charges for April amounted to Br 25.
g) A check for Br 880 from Hope Co. was returned by the bank because of insufficient funds.
Instructions:
1) Prepare a bank reconciliation as of April 30.
2) Journalize the necessary entries.

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PROBLEM 4-3 TRANSACTIONS FOR PETTY CASH; CASH SHORT AND OVER

KK Company completed the following selected transactions during March 2013:

Mar. 1. Established a petty cash fund of Br 850.
18. The cash sales for the day, according to the cash register records, totaled Br 11,970.60. The actual
cash received from cash sales was Br 12,007.50.
Mar.31. Petty cash on hand was Br 20.18. Replenished the petty cash fund for the following disbursements,
each evidenced by a petty cash receipt:
Mar. 3. Store supplies, Br 198.10.
6. Express charges on merchandise sold, Br 120 (Transportation Out).
9. Office supplies, Br 13.75.
18. Office supplies, Br 49.30.
20. Postage stamps, Br 74 (Office Supplies).
21. Repair to office printer, Br 150.00 (Miscellaneous Administrative Expense).
22. Postage due on special delivery letter, Br 40.00 (Miscellaneous Administrative
Expense).
24. Express charges on merchandise sold, Br 125 (Transportation Out).
27. Office supplies, Br 41.15.
31. The cash sales for the day, according to the cash register records, totaled Br 9,055.50. The actual
cash received from cash sales was Br 9,010.25.

PROBLEM 4-4 TRANSACTIONS FOR PETTY CASH; CASH SHORT AND OVER

The Ostrich Company completed the following selected transactions during June 2013:
June 1. Established a petty cash fund of Br 600.
6. The cash sales for the day, according to the cash register records, totaled Br 7,998.50. The actual
cash received from cash sales was Br 8,008.15.
30. Petty cash on hand was Br 50.75. Replenished the petty cash fund for the following disbursements,
each evidenced by a petty cash receipt:
June 3. Store supplies, Br 30.75.
8. Express charges on merchandise purchased, Br 100.75 (Merchandise Inventory).
12. Office supplies, Br 74.30.
15. Office supplies, Br 35.20.
19. Postage stamps, Br 52.00 (Office Supplies).
20. Repair to fax, Br 110.00 (Miscellaneous Administrative Expense).
21. Repair to printer, Br 51.50 (Miscellaneous Administrative Expense).
22. Postage due on special delivery letter, Br 18.00 (Miscellaneous Administrative Expense).
27. Express charges on merchandise purchased, Br 65.50 (Merchandise Inventory).
30. The cash sales for the day, according to the cash register records, totaled Br 9,009.50. The actual cash
received from cash sales was Br 8,988.35.
30. Decreased the petty cash fund by Br 150.

Instructions: Journalize the transactions.

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PROBLEM 4-5 BANK RECONCILIATION AND ENTRIES

The cash account for Favorite Co. at April 30, 2014, indicated a balance of Br 13,290.95. The bank
statement indicated a balance of Br 18,016.30 on April 30, 2014. Comparing the bank statement and the
accompanying canceled checks and memorandums with the records revealed the following reconciling
items:
a) Checks outstanding totaled Br 7,169.75.
b) A deposit of Br 5,189.40, representing receipts of April 30, had been made too late to appear on the
bank statement.
c) The bank had collected Br 3,240 on a note left for collection. The face of the note was Br 3,000.
d) A check for Br 1,960 returned with the statement had been incorrectly recorded by Favorite Co. as Br
1,690. The check was for the payment of an obligation to Blue Sky Co. for the purchase of office
equipment on account.
e) A check drawn for Br 1,680 had been erroneously charged by the bank as Br 1,860.
f) Bank service charges for April amounted to Br 45.00.
Instructions:
a) Prepare a bank reconciliation.
b) Journalize the necessary entries.

PROBLEM 4-6 BANK RECONCILIATION AND ENTRIES

The cash account for Blue Star Co. at March 1, 2006, indicated a balance of Br 3,945.90. During March,
the total cash deposited was Br 31,077.75, and checks written totaled Br 30,395.78. The bank statement
indicated a balance of Br 5,465.50 on March 31. Comparing the bank statement, the canceled checks, and
the accompanying memorandums with the records revealed the following reconciling items:
a) Checks outstanding totaled Br 3,003.84.
b) A deposit of Br 2,148.21, representing receipts of March 31, had been made too late to appear on the
bank statement.
c) The bank had collected for Blue Star Co. Br 1,908 on a note left for collection. The face of the note was
Br 1,800.
d) A check for Br 120 returned with the statement had been incorrectly charged by the bank as Br 1,200.
e) A check for Br 318 returned with the statement had been recorded by Blue Star Co. as Br 138. The
check was for the payment of an obligation to Good Luck Co. on account.
f) Bank service charges for March amounted to Br 30.
g) A check for Br 636 from Fontana Co. was returned by the bank because of insufficient funds.
Instructions:
a) Prepare a bank reconciliation as of March 31.
b) Journalize the necessary entries.

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PROBLEM 4-7 BANK RECONCILIATION AND ENTRIES

The following data were accumulated for use in reconciling the bank account of King Co. for March:
a) Cash balance according to the depositor’s records at March 31, Br 7,671.45.
b) Cash balance according to the bank statement at March 31, Br 4,457.25.
c) Checks outstanding, Br 2,276.20.
d) Deposit in transit, not recorded by bank, Br 5,780.40.
e) A check for Br 145 in payment of an account was erroneously recorded in the check register as Br 451.
f) Bank debit memorandum for service charges, Br 16.00.
Instructions:
a) Prepare a bank reconciliation.
b) Journalize the entry or entries that should be made by the depositor.

CHECKING FIGURES
PROBLEM ADJUSTED BALANCE
PROBLEM 4-1 Br 26,315.40
PROBLEM 4-2 Br 16,821.88
PROBLEM 4-5 Br 16,215.95
PROBLEM 4-6 Br 5,689.87
PROBLEM 4-7 Br 7,961.45