You are doing the first-year audit of Sherman School District and have been assigned responsibility for doing a four-column proof of cash for the month of October 2019. You obtain the following information:
In-class
Discussion
Required
*Based on AICPA question paper, American Institute of Certified Public Accountants.
778Part 4 / APPLICATION OF THE AUDIT PROCESS TO OTHER CYCLES
1. Balance per books September 30 $ 10,725
October 31 5,836
2. Balance per bank September 30 6,915
October 31 8,276
3. Outstanding checks September 30 1,811
October 31 2,615
4. Cash receipts for October per bank 28,792
per books 20,271
5. Deposits in transit September 30 5,621
October 31 996
6. Interest on a bank loan for the month of October, charged by the bank
but not recorded, was $596.
7. Proceeds on a note of the Jones Company were collected by the bank on
October 28 but were not entered on the books:
Principal $ 2,900
Interest 396
$ 3,296
8. On October 26, a $1,144 check of the Billings Company was charged to Sherman
School District’s account by the bank in error.
9. Dishonored checks are not recorded on the books unless they permanently fail to
clear the bank. The bank treats them as disbursements when they are dishonored and
as deposits when they are redeposited. Checks totaling $1,335 were dishonored in
October; $600 was redeposited in October and $735 in November.
a. Prepare a four-column proof of cash for the month ended October 31. It should show both adjusted and unadjusted cash.
b. Prepare all adjusting entries.
