The bookkeeper at Hopkins Company has not reconciled the bankstatement with the

Question

The bookkeeper at Hopkins Company has not reconciled the bankstatement with the Cash account, saying, “I don’t havetime.” You have been asked to prepare a reconciliation andreview the procedures with the bookkeeper.

The April 30, 2006, bank statement and the April ledger accountsfor cash showed the following (summarized):

A comparison of checks written before and during April with thechecks cleared through the bank showed outstanding checks at theend of April of $2,200. No deposits in transit were carried overfrom March, but a deposit was in transit at the end of April.

Explanation / Answer

1. Bank reconciliation is done in the previous question. Journals A.    Cash or Bank             Dr     1,070    Interest income                    1,070 B.      A/R           Dr    140    Cash          140 C. Bank service fee Dr    50    Cash       50

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