Wright Company deposits all cash receipts on the day when they are received and

Question

Wright Company deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on May 31, 2016, its Cash account shows a $28,900 debit balance. The company's May 31 bank statement shows $27,200 on deposit in the bank. a. The May 31 bank statement included a $170 debit memorandum for bank services; the company has not yet recorded the cost of these services. b. Outstanding checks as of May 31 total $6,300. c. May 31 cash receipts of $6,900 were placed in the bank's night depository after banking hours and were not recorded on the May 31 bank statement. d. In reviewing the bank statement, a $470 check written by Smith Company was mistakenly drawn against Wright's account. e. A debit memorandum for $460 refers to a $460 NSF check from a customer, the company has not yet recorded this NSF check. Prepare a bank reconciliation for the company using the above information. WRIGHT COMPANY Bank Reconciliation May 31, 2016 Bank statement balance Book balance Add: Add: Deduct: Deduct: Adjusted bank balance Adjusted book balance

Explanation / Answer

WRIGHT COMPANY Bank Reconciliation May 31, 2016 Bank statement balance 27200 Book balance 28900 Add: Add: Deposit of May 31 6900 Bank error 470 7370 34570 28900 Deduct: Deduct: Outstanding checks 6300 Bank service charge 170 NSF check 460 6300 630 Adjusted bank balance 28270 Adjusted book balance 28270

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