An accounting clerk for Lock-It Co. prepared the following bankreconciliations:
ID: 2457612 • Letter: A
Question
An accounting clerk for Lock-It Co. prepared the following bankreconciliations:
Lock-It Co.
Bank Reconciliation
October 31, 2008
Cash Balance according to company’srecords $9,305.60
Add: OutstandingChecks $7,115.35
Error by Lock-It Co. in recording Check
No. 1007 as $4,715 instead of$4,175 540.00
Note for $5,000 collect by bank includinginterest 5,375.00 13,030.35
$22,335.95
Deduct: Deposit in transit on October31 $13,690.45
Bank servicecharges 45.00 13,735.45
$8,600.50
Explanation / Answer
Lock -It co. Bank Reconciliation Oct 31,08 Balance Per Companybooks 9,305.60 Add Note collected by bank 5,375.00 Error in recording check 540.00 5,915.00 15,220.60 Less Bank servicecharge 45.00 Adjusted Book Balance as on oct31st 15,175.60 Cash balance to report in the balance sheet is $ 15,175.60 Explanation Outstanding checks and deposit in transit are used when reconcilingbank balance to book balance. Here , reconciliation is done by taking book balance to bookbalance.
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