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Bank Reconciliation

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Tolera Demissie
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89 views5 pages

Bank Reconciliation

hghf

Uploaded by

Tolera Demissie
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Project One

On May 31, 2014, Reber Company had a cash balance per books of $6,781.50. The bank
statement from New York State Bank on that date showed a balance of $6,404.60. A comparison
of the statement with the Cash account revealed the following facts.

1. The statement included a debit memo of $40 for the printing of additional company checks.
2. Cash sales of $836.15 on May 12 were deposited in the bank. The cash receipts journal entry
and the deposit slip were incorrectly made for $886.15. The bank credited Reber Company
for the correct amount.
3. Outstanding checks at May 31 totaled $576.25. Deposits in transit were $2,416.15.
4. On May 18, the company issued check No. 1181 for $685 to Lynda Carsen on account. The
check, which cleared the bank in May, was incorrectly journalized and posted by Reber
Company for $658.
5. A $3,000 note receivable was collected by the bank for Reber Company on May 31 plus $80
interest. The bank charged a collection fee of $20. No interest has been accrued on the note.
6. Included with the cancelled checks was a check issued by Stiner Company to Ted Cress for
$800 that was incorrectly charged to Reber Company by the bank.
7. On May 31, the bank statement showed an NSF charge of $680 for a check issued by
8. Sue Allison, a customer, to Reber Company on account.
Instructions
(a) Prepare the bank reconciliation at May 31, 2014.
(b) Prepare the necessary adjusting entries for Reber Company at May 31, 2014.
Project Two
Tsegay Trading has received his bank pass sheets for the year to 31, October 2015. As the date,
his balance at the bank amounted to birr 14,130 whereas his own cash book showed a balance of
birr 47,330. His accountant investigated the matter and discovered the following discrepancies:
a. Bank charges of birr 60 had not been entered in the cash book.
b. Checks drawn by Tsegay & totaling 450 had not yet been presented to the bank.
c. Tsegay had not entered receipts of birr 530 in his cash book from credit customer.
d. The bank had not credited Tsegay with receipts of birr 1,970 paid in to the bank on
31stOctober, 2015.
e. Payments of creditors amounting to birr 1,240 had not been entered in the cash book.
f. Tsegay had entered a payment of wages expense birr 560 in his cash book as birr 650.
g. A check received for birr 300 from debtor had been returned by the bank marked “refer to
drawer”, but this had not been written back in the cash book.
h. Check totaling birr 6,585 draw on 29th October for payment of notes payable had been
debited instead of credited.
i. Depositsin transit October 31, totaled birr 880.
j. Some of Tsegay’s customers had paid to settle their debts by direct debit. Unfortunately,
the bank had credited some direct debits amounting to birr 16,650 to another customer’s
account.
Required:
1. Prepare bank reconciliation for Tsegay trading at November 30, 2015.
2. Prepare the general journal entries necessary to bring the cash in bank account into
agreement the adjustment.
1. Solution

REBER COMPANY
Bank Reconciliation
May 31, 2014

Cash balance per bank statement.................... $6,404.60


Add: Deposit in transit ................................. $2,416.15
Bank error—Stiner check ...................... 800.00 3,216.15 9,620.75

Less: Outstanding checks ............................... 576.25


Adjusted cash balance per bank ............................................. $9,044.50

Cash balance per books................................... $6,781.50


Add: Collection of note receivable
($3,000 note plus $80 interest less $20 fee)......................... 3,060.00 9,841.50

Less: NSF check............................................... $ 680.00


Error in May 12 deposit ($886.15 – $836.15)....................... 50.00
Error in recording check No. 1181……………........ 27.00
Check printing charge .................................... 40.00 797.00

Adjusted cash balance per books....................... $9,044.50

(b) May 31 Ca......................................... 3,060


Notes Receivable .............................................................................. 3,000
Interest Revenue................................................................................ 60

31 Accounts Receivable—Sue Allison ............ 680


Cash.................................................................................................. 680

31 Sales Revenue .............................................. 50


Cash ....................................................... 50

31 Accounts Payable—Lynda Carsen ............. 27


Miscellaneous Expense ............................... 40
Cash ………………………………………………….67
2. Solution
Tsegaye Trading
Bank Reconciliation
October 31, 2015
Balance per Bank Statement----------------------------------------------------------14,130
Add: Deposit not record by Bank----------------------------1,970
Deposit in Transit-----------------------------------------880
Bank Error -------------------------------------------------16,630
Subtotal------------------------------------------------------------------------------------33,630
Deduct: Check Outstanding------------------------------------------------------------- 450
Adjusted Balance-------------------------------------------------------------------------33,180
Balance per Depositor Record-----------------------------------------------------------47,330
Add: Collected by Bank------------------------------------------530
Depositor Error----------------------------------------------90
Subtotal--------------------------------------------------------------------------------------47,950
Deduct:
Payment to creditor----------------------------- 1240
Bank service-------------------------------------- 60
Refers return drawer----------------------------- 300
Depositor Error---------------------------------- 13,170 14,770
Adjusted Balance--------------------------------------------------------------------------33,180
Journal enters

1. Cash in bank--------------------------------------620
Collection from customer--------------------------------------------530
Account payable------------------------------------------------------90
2. Payment creditor------------------------------1240
Miscellaneous expense-------------------------60
Refers return drawer--------------------------300
A/payable---------------------------------------13,170
Cash in bank----------------------------------------------------------------------14,770

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