Bank Reconciliation A bank reconciliation explains the causes for any difference
ID: 2499345 • Letter: B
Question
Bank Reconciliation
A bank reconciliation explains the causes for any differences between a company's cash balance on its bank statement and its cash balance on the books (that is, in the ledger. )
Allez Company's monthly bank statement shows an account balance of $5,860.23. The cash balance in its ledger is $4,933.90.
A thorough bank reconciliation investigation yields the following information:
Prepare the bank reconciliation for Allez Co. Enter amounts to the nearest cent.
Allez Co.
Bank Reconciliation
January 31, 2014
Cash balance per bank statement
$
$
$
Adjusted balance
$
Cash balance per company records
$
$
$
$
Adjusted balance
$
The bank erroneously deducted $344.77 from the company's account when the actual amount of a check written by the company was $324.77. The company erroneously recorded a check it wrote for $478.08 as $748.08. The company recently made a $618.01 deposit that has not yet been reflected on the bank statement. The bank collected a $490.00 note receivable, plus $9.00 in interest, which has not been recorded in the company's records. Bank service charges of $14.00 have been assessed to the company's account. There are two checks outstanding (not yet appearing on the bank statement) that were written for $795.33 and $532.49. A $518.48 check from one of the company's customers, Phil Conners, was returned by the bank because of insufficient funds (NSF) in the customer's account.Explanation / Answer
Allez Co.
Bank Reconciliation
January 31, 2014
Cash balance per bank statement
$ 5,860.23
Add: Bank Error (344.77-324.77)
$ 20.00
Add: Deposit in transit
$ 618.01
$ 638.01
$ 6,498.24
Less: Checks outstanding (795.33+532.49)
$ (1,327.82)
Adjusted balance
$ 5,170.42
Cash balance per company records
$ 4,933.90
Add: Check Recording error (748.08 -478.08)
$ 270.00
Add: Note collection (490+9)
$ 499.00
$ 769.00
$ 5,702.90
Less: Bank Service Charges
$ (14.00)
Less: NSF Check
$ (518.48)
$ (532.48)
Adjusted balance
$ 5,170.42
Allez Co.
Bank Reconciliation
January 31, 2014
Cash balance per bank statement
$ 5,860.23
Add: Bank Error (344.77-324.77)
$ 20.00
Add: Deposit in transit
$ 618.01
$ 638.01
$ 6,498.24
Less: Checks outstanding (795.33+532.49)
$ (1,327.82)
Adjusted balance
$ 5,170.42
Cash balance per company records
$ 4,933.90
Add: Check Recording error (748.08 -478.08)
$ 270.00
Add: Note collection (490+9)
$ 499.00
$ 769.00
$ 5,702.90
Less: Bank Service Charges
$ (14.00)
Less: NSF Check
$ (518.48)
$ (532.48)
Adjusted balance
$ 5,170.42
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