Scribd
Upload
62 views4 pages

In Class - Bank Reconciliation Exercise

Uploaded by

wpshan234
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
62 views4 pages

In Class - Bank Reconciliation Exercise

Uploaded by

wpshan234
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
You are on page 1/ 4

BANK RECONCILIATION - PROBLEM

Exercise 1: At August 31, the Company has this bank information: cash balance per bank
$7,150; outstanding checks $962; deposits in transit $1,700; and a bank service charge $20.
Determine the adjusted cash balance per bank at August 31.

Balance per bank 7,150


Add: Deposit in transit 1,700
8,850
Less: Outstanding check 962
Correct balance 7,888

Exercise 2: Given the following information, determine the adjusted cash balance per books.
1. Balance per books as of June 30, $8,300.
2. Outstanding checks, $600. Bank -
3. NSF check returned with bank statement, $130. Book -
4. Deposit in transit, $300. Bank +
5. Check printing charges, $30. Book -
6. Interest earned = Interest revenue on checking account, $40. Book +

Balance per book 8,300


Add: Interest earned 40
8,340
Less: NSF check 130
Check printing charges 30 160
Correct balance 8,180
Exercise 3: Gordon Company is unable to reconcile the bank balance at January 31. Gordon’s
reconciliation is as follows.

Cash balance per bank $5,340


Add: NSF check 1,240 Book -
Less: Bank service charge 35 Book -
Adjusted balance per bank $6,545

Cash balance per books $5,815


Less: Deposits in transit 850 Bank +
Add: Outstanding checks 1,650 Bank -
Adjusted balance per books $6,615
Required: Prepare a correct bank reconciliation.

Balance per bank 5,340


Add: Deposit in transit 850
6,190
Less: Outstanding check 1,650
Correct balance 4,540

Balance per book 5,815


Less: NSF check 1,240
Bank service charge 35 1,275
Correct balance 4,540
Exercise 4: Dillman Food Store developed the following information in recording its bank
statement for the month of March.
Balance per books March 31 $ 2,905
Balance per bank statement March 31 $10,900
1. Checks written in March but still outstanding $6,000. Bank -
2. Checks written in February but still outstanding $2,800. Bank -
3. Deposits of March 30 and 31 not yet recorded by bank $5,200. Deposit in transit =
Bank +
4. NSF check of customer returned by bank $1,200. Book -
5. Error: Check No. 210 for $594 was correctly issued and paid by bank but incorrectly
entered in the cash payments journal as payment on account for $549. Book - $45
6. Bank service charge for March was $50. Book -
7. Error: A payment on account was incorrectly entered in the cash payments journal and
posted to the accounts payable subsidiary ledger for $824 when Check No. 318 was
correctly prepared for $284. The check cleared the bank in March. Book + $540
8. The bank collected a note receivable for the company for $5,000 plus $150 interest
revenue. Book + (Principal amount + Interest revenue – Bank service charge = 5,000
+ 150 – 0 = $5,150)
Required: Prepare the bank reconciliation.
DILLMAN FOOD STORE
Bank Reconciliation
March 31
Balance per bank 10,900 Balance per book 2,905
Add: Deposit in transit 5,200 Add: Notes collection 5,150
16,100 Error # 318 540 5,690
Less: Outstanding check 8,800 8,595
Correct balance 7,300 Less: Service charge 50
NFS check 1,200
Error # 210 45 1,295
Correct balance 7,300
Error From No. 5: Check No. 210 for $594 was correctly issued and paid by bank but
incorrectly entered in the cash payments journal as payment on account for $549. Book - $45
First method: 594 – 549 = $45

Without Error With Error Correction


A/P 594 A/P 549 A/P 45
Cash 594 Cash 549 Cash 45

Second method: Assume the amount for $1,000

Error No. 7: A payment on account was incorrectly entered in the cash payments journal
and posted to the accounts payable subsidiary ledger for $824 when Check No. 318 was
correctly prepared for $284. The check cleared the bank in March. Book + $540

Without Error With Error Correction


A/P 284 A/P 824 Cash 540
Cash 284 Cash 824 A/P 540

824 – 284 = $540

Second method: Assume the amount for $1,000

You might also like