Question

An accounting clerk prepared the following bank reconciliation for Inges Corp. Inges Corp Bank Reconciliation August 31 Cash balance according to company records $14,690 Adjustments: Outstanding checks $1,020 Error by company in recording Ck. 2490 as $1.540 instead of $1.450 90 Note collected by bank, including $200 interest 3,200 Deposits in transit on August 31 (2,750) Bank service charges _(40) Total adjustments 1,520 Cash balance according to bank statement $16,210 (a) Use the data in the bank reconciliation to prepare a new bank reconciliation for Inges Corp. that adjusts both the company's books and the bank statement balance in the traditional format. SHOW WORK FOR PARTIAL POINTS! (b) If a balance sheet were prepared for Inges Corp. on August 31, what amounts should be reported for cash?

Answer 1

(a)

Balance as per bank	$       16,210	Balance as per books		$ 14,690
Add : Deposit in transit	$         2,750	Add :
	$       18,960	Check recorded in excess	$          90
Less : Outstanding Checks	$         1,020	Note collected by bank	$    3,200	$    3,290
				$ 17,980
		Less : Bank Service charges		$          40
Adjusted Balance as per bank	$       17,940	Adjusted Balance as per books		$ 17,940

(b)
$17940 will be reported as cash in balance sheet