On August 31, 2012, the general ledger of The Dean Acting Academy shows a balanc

Question

On August 31, 2012, the general ledger of The Dean Acting Academy shows a balance for cash of $7,943. Cash receipts yet to be deposited into the checking account total $3,390, and checks written by the academy but not yet processed by the bank total $1,365. The company's balance of cash does not reflect a bank service fee of $50 and interest earned on the checking account of $40. These amounts are included in the balance of cash of $5,908 reported by the bank as of the end of August.

Prepare a bank reconciliation to calculate the correct ending balance of cash on August 31, 2012.(Amounts to be deducted should be indicated with a minus sign.)

On August 31, 2012, the general ledger of The Dean Acting Academy shows a balance for cash of $7,943. Cash receipts yet to be deposited into the checking account total $3,390, and checks written by the academy but not yet processed by the bank total $1,365. The company's balance of cash does not reflect a bank service fee of $50 and interest earned on the checking account of $40. These amounts are included in the balance of cash of $5,908 reported by the bank as of the end of August.

Explanation / Answer

BALANCE AS PER CASH BOOK = 7943

ADJUSTMENTS:-

LESS:-UNPROCESSED DEPOSITS = (3390)

LESS:-BANK SERVICE FEES = (50)

ADD:-UNPROCESSED WRITTEN CHEQUES FOR PAYMENT = 1365

ADD:-INTERST EARNED = 40

BALANCE AS PER BANK STATEMENT = 5908

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