Question

[The following information applies to the questions displayed below.]

Hills Company’s June 30 bank statement and the June ledger account for cash are summarized here:

BANK STATEMENT
	Checks			Deposits			Other			Balance
Balance, June 1										$	7,200
Deposits during June				$	18,000						25,200
Checks cleared during June	$	19,100									6,100
Bank service charges							$	30			6,070
Balance, June 30											6,070

Cash (A)
June 1	Balance	6,800
June	Deposits	19,000	19,400	Checks written	June
June 30	Balance	6,400

Required:

1. Prepare a bank reconciliation. A comparison of the checks written with the checks that have cleared the bank shows outstanding checks of $700. Some of the checks that cleared in June were written prior to June. No deposits in transit were noted in May, but a deposit is in transit at the end of June.

HILLS COMPANY
Bank Reconciliation
June 30
Bank Statement			Company's Books
Ending Balance per Bank Statement			Ending Balance per Cash Account
Additions:			Additions:
		0			0
		0			0
Deductions:			Deductions:
		0			0
Up-to-Date Cash Balance		$0	Up-to-Date Cash Balance		$0

Answer 1

Hills Company Bank Reconciliation Jun-30 Bank Statement Balance as per Bank Statement Add: Deposits Company's Books 6070 Balance as per Cash Book Add: 6400 1000 Deductions: Outstanding Checks 1000 7070 Deductions: Bank Service Charges 700 6370 Updated Cash Balance 700 30 Updated Cash Balance 30 6370 Deposit in Transit = $19,000 - $18,000 = $1,000. Adjusting Enteries Trans. Particulars Debit in $ Credit in $ i Office Expense a/c Dr. 30 To Cash 30 (Bank charges recorded)