Question

Bentley Company’s June 30 bank statement and June ledger account for cash are summarized below:

BANK STATEMENT
	Checks				Deposits				Balance
Balance, June 1										$	6,500
Deposits during June						$	16,200				22,700
Checks cleared during June		$	16,600								6,100
Bank service charges			40								6,060
Balance, June 30											6,060

Cash (A)
June 1 Balance	6,500	June Checks written	19,000
June Deposits	18,100

Required:

1. Reconcile the bank account. A comparison of the checks written with the checks that have cleared the bank shows outstanding checks of $2,400. A deposit of $1,900 is in transit at the end of June.

2. Prepare the journal entry that should be made as a result of the bank reconciliation.

3. What is the balance in the Cash account after the reconciliation entries?

4. What is the total amount of cash that should be reported on the balance sheet at June 30?

Answer 1

1
Bank Reconciliation, June 30
Company's Books			Bank statement
Ending balance per cash account		5600	Ending balance per bank statement		6060
Additions:			Additions:
			Deposit in Transit	1900
		0			1900
		5600			7960
Deductions:			Deductions:
Bank service charge	40		Outstanding checks	2400
		40			2400
Correct Cash balance		5560	Correct Cash balance		5560

2
	General Journal	Debit	Credit
June 30	No journal entry required
June 30	No journal entry required
June 30	Bank service charge expense	40
	Cash		40

3
Cash balance	5560
4
Total amount of Cash	5560