Bank Reconciliation The cash account of Mason Products reveals the following inf
ID: 2610241 • Letter: B
Question
Bank Reconciliation The cash account of Mason Products reveals the following information: Cash Balance, 4/30 Deposits during May The bank statement for May contains the following information: Bank balance, 4/30 Add: Deposits during May 10,260 39,600 Cheques written during May 40,000 10,260 37,400 $47,660 $38,500 140 $50 Less: Cheques paid during May NSF cheque from Higgins, Inc. Bank service charges $38,690 Bank balance, 5/31 $8,970 A comparison of detailed company records with the bank statement indicates the following information: Deposits in transit Outstanding cheques The bank amounts are determined to be correct. At 4/30 $900 550 At 5/31 $2,200 1,500Explanation / Answer
PART 1
Mason products
Bank reconciliation schedule
May 31
Cash balance from bank statement
8970
Add: deposit in transit
2200
Less: outstanding cheques
1500
Adjusted cash balance
9670
Cash balance from company records:
9860
Less:
Service charges
50
NSF cheque
140
190
Adjusted cash balance
9670
=10260+39600-40000 = 9860
PART 2
May 31
Bank service charge expenses
50
Cash
50
(record bank service charge)
May 31
Accounts receivable
140
Cash
140
(record NSF cheque)
PART 3
The cash reported on the statement of financial position at May 31 is adjusted cash balance i.e. 9670
Cash balance from bank statement
8970
Add: deposit in transit
2200
Less: outstanding cheques
1500
Adjusted cash balance
9670
Cash balance from company records:
9860
Less:
Service charges
50
NSF cheque
140
190
Adjusted cash balance
9670
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