The following information is available to assist you in preparing a bank reconci
ID: 2387284 • Letter: T
Question
The following information is available to assist you in preparing a bank reconciliation for Calico Corners on May 31, 2010:a. the balance on the May 31, 2010, bank statement is $8,432.11
b. Not included on the bank statement is a $1,250 deposit made by Calico Corner late on May 31.
c. A comparison between the canceled checks returned with the bank statement and the company records indicated that the following checks are outstanding at May 31:
No. 123 $23.40
No. 127 $145.00
No. 128 $210.80
No. 130 $67.32
d. the cash account on the company's books shows a balance of $9,965.34
e. the bank acts as a collection agency for interest earned on some municipal bonds held by Calico Corners. The May bank statement indicates interest of $465.00 earned during the month
f. interest earned on the checking account and added to Calico Corners account during May was $54.60. Miscellaneous bank service charges amounted to $50.00.
g. A customers NSF check in the amount of $166.00 was returned with the May bank statement.
h. A comparison between the deposits listed on the bank statement and the companys books revealed that a customers check in the amount of $123.45 was recorded on the books during May but was never added to the companys account. The bank erroneously added the check to the account of Calico Closet, which has an account at the same bank.
i. The comparison of deposits per the bank statement with those per the books revealed that another customers check in the amount of $101.10 was correctly added to the companys account. In recording the check on the companys books, however, the accountant erroneously increased the Cash account by $1011.00.
Required
1.Prepare a bank reconciliation in good form.
2.Record the necessary journal entries on the companys books resulting from the bank reconciliation prepared in part (1) above.
Explanation / Answer
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3. The bank reconciliation statement should be prepared as soon as you receive your monthly bank statement. The prompt reconciliation of the bank statement to your checkbook will ensure that your records are kept current and that any adjustments are recorded to both set of books. For preparation, you will need to segregate two columns, one for your books (check register) and the other for the bank statement.
Particulars Amount Amount Balance per bank statement, May 31 $8,432.11 Add: Deposit-in-transit $1,250.00 Bank error: deposit credited to wrong account $123.45 $1,373.45 Deduct: Outstanding checks #123 $23.40 #127 $145.00 #128 $210.80 #130 $67.32 $(446.52) Adjusted balance, May 31 $9,359.04 Balance per books, May 31 $9,965.34 Add: Interest earned on bonds $465.00 Interest earned on account $54.60 $519.60 Deduct: Bank service charges $50.00 NSF check $166.00 Book error: Deposit of $101.10 recorded as $1,011.00 $909.90 $(1,125.90) Adjusted balance, May 31 $9,359.04Related Questions
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