An examination of the cash activities during the year shows the following. Suzie

Question

An examination of the cash activities during the year shows the following.  
     

  

   

Suzie has not reconciled the company’s cash balance with that of the bank since the company was started. She asks Summit Bank to provide her with a six-month bank statement. To save time, Suzie makes deposits at the bank only on the first day of each month.
   

Deposits and Credits

Withdraws and Debits

  

  
After comparing the two balances, Suzie has some concern because the bank’s balance of $53,650 is substantially less than the company’s balance of $67,350.
   
2-a. Prepare Great Adventures’ bank reconciliation for the six-month period ended December 31, 2018. (Amounts to be deducted should be indicated with a minus sign. Total entries to the same account together when entering in the bank reconciliation.)

GREAT ADVENTURES
Cash Account Records
July 1, 2018, to December 31, 2018 Deposits Checks/Debit Cards   Date   Desc. Amount   Date No.   Desc. Amount   7/1   Stock sale $ 20,000       7/1 101   Insurance $ 4,200      7/15   Clinic receipts 2,000       7/2 102   Legal fees 1,250      7/22   Clinic receipts 2,300       7/7 DC   Advertising 250      7/30   Clinic receipts 4,000       7/8 103   Bikes 11,500      8/1   Borrowing 25,000       7/24 DC   Advertising 650      8/10   Clinic receipts 3,000       8/4 104   Kayaks 21,000      8/17   Clinic receipts 10,500       8/24 DC   Office supplies 1,750      9/21   Clinic receipts 12,700       9/1 105   Rent 1,800      10/17   Clinic receipts 17,400       12/8 106   Race permit 1,150      12/15   Race receipts 20,000       12/16 107   Salary 2,000      12/31 108   Dividend 2,000      12/31 109   Dividend 2,000       $ 116,900        $ 49,550      

Explanation / Answer

Bank Reconciliation for six-month period is shown as under:

Great Adventures Bank Reconciliation December 31, 2018 Particulars Amount ($) Amount ($) Balance as per Bank Statement, Dec 31 53,650 Add: a. Customer Deposit not recorded (Race receipts received on Dec 15) 20,000 20,000 Less: Outstanding checks (Salary and dividend) 6,000 6,000 Adjusted balance 67,650 Balance as per Depositor's records 67,350 Add: Interest Earned on Deposits 500 500 Less: Bank service fees 200 200 Adjusted balance 67,650

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