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Chapter 6: Q9BTN_2 (page 318)

The following information is from Samsung (Samsung.com or its financial statements in Appendix A), which is a leading manufacturer of consumer electronic products.

W in millions Current Year Prior Year

Cash . . . . . . . . . . . . . . . . . . . . . . . . W 22,636,744 W 16,840,766

Accounts receivable . . . . . . . . . . . . 28,520,689 28,234,485

Current assets . . . . . . . . . . . . . . . . . 124,814,725 115,146,026

Total assets . . . . . . . . . . . . . . . . . . . 242,179,521 230,422,958

Current liabilities . . . . . . . . . . . . . . . 50,502,909 52,013,913

Shareholders’ equity . . . . . . . . . . . 179,059,805 168,088,188

Net sales . . . . . . . . . . . . . . . . . . . . . 200,653,482 206,205,987

Required

2. Determine the percentage change (rounded to one decimal) between the current and prior year cash balances.

Short Answer

Expert verified

Answer

The percentage change between the current and prior year cash balances is 0.3%.

Step by step solution

01

Step-by-Step SolutionStep 1: Meaning of Cash and Cash Equivalents and its formula

Cash and cash equivalents are a part of the balance sheet, and it includes all those assets which can be easily changeable or convertible into cash.

Formula- Percentagecharge=Endingcashandcashequivalent-BeginningcashandcashequivalentBeginningcashandcashequivalent

02

Computation-

Cash, beginning-year

16,840,766

Cash, year-end

22,636,744

Percent change

0.3%

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Most popular questions from this chapter

For each of the following items a through g, indicate whether its amount (1) affects the bank or book side of a bank reconciliation, (2) represents an addition or a subtraction in a bank reconciliation, and (3) requires an adjusting journal entry.

Bank or Book Side Add or Subtract Adj. Entry or Not

e. Credit memo on collection of notes . . . . . . . . . . . . . . .

Nolan Company deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on June 30, 2017, its Cash account shows a \(22,352 debit balance. Nolan’s June 30 bank statement shows \)21,332 on deposit in the bank. Prepare a bank reconciliation for the company using the following information.

c. In reviewing the bank statement, a \(90 check written by the company was mistakenly recorded in the company’s books at \)99.

The following information is available to reconcile Severino Co.’s book balance of cash with its bank statement cash balance as of December 31, 2017.

a. The December 31 cash balance according to the accounting records is \(32,878.30, and the bank statement cash balance for that date is \)46,822.40.

b. Check No. 1273 for \(4,589.30 and Check No. 1282 for \)400, both written and entered in the accounting records in December, are not among the canceled checks. Two checks, No. 1231 for \(2,289 and

No. 1242 for \)410.40, were outstanding on the most recent November 30 reconciliation. Check No. 1231 is listed with the December canceled checks, but Check No. 1242 is not.

c. When the December checks are compared with entries in the accounting records, it is found that Check No. 1267 had been correctly drawn for \(3,456 to pay for office supplies but was erroneously entered in the accounting records as \)3,465.

d. Two memoranda are enclosed with the statement and are unrecorded at the time of the reconciliation. The first is for a \(762.50 charge that dealt with an NSF check for \)745 received from a customer, Titus Industries, in payment of its account. The bank assessed a \(17.50 fee for processing it. The second is \)99 in miscellaneous expenses for check printing.

e. The bank statement shows that the bank collected \(19,000 cash on a note receivable for the company, deducted a \)20 collection expense, and credited the balance to the company’s Cash account. Severino did not record this transaction before receiving the statement.

f. Severino’s December 31 daily cash receipts of $9,583.10 were placed in the bank’s night depository on that date but do not appear on the December 31 bank statement.

Required

1. Prepare the bank reconciliation for this company as of December 31, 2017.

Nakashima Gallery had the following petty cash transactions in February of the current year.

Feb. 2 Wrote a \(400 check, cashed it, and gave the proceeds and the petty cashbox to Chloe Addison, the petty cashier.

5 Purchased paper for the copier for \)14.15 that is immediately used.

9 Paid \(32.50 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Nakashima uses the perpetual system to account for merchandise inventory.

12 Paid \)7.95 postage to deliver a contract to a client.

14 Reimbursed Adina Sharon, the manager, \(68 for mileage on her car.

20 Purchased stationery for \)67.77 that is immediately used.

23 Paid a courier \(20 to deliver merchandise sold to a customer, terms FOB destination.

25 Paid \)13.10 COD shipping charges on merchandise purchased for resale, terms FOB shipping point.

27 Paid \(54 for postage expenses.

28 The fund had \)120.42 remaining in the petty cashbox. Sorted the petty cash receipts by accounts affected and exchanged them for a check to reimburse the fund for expenditures.

28 The petty cash fund amount is increased by \(100 to a total of \)500.

Required

1. Prepare the journal entry to establish the petty cash fund.

2. Identify the two events from the following that cause a Petty Cash account to be credited in a journal entry.

a. Fund amount is being reduced. c. Fund is being eliminated.

b. Fund amount is being increased. d. Fund is being established
See all solutions

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