Question

The Controller of Trent & Co. asks you to pres of Trent & Co. asks you to prepare a bank reconditionat 10/31/2019 using the following information: Balance per the bank's statement at 10/31/2019: $110,000 Company book cash balance at 10/31/2019: $106,300 Amount deposited at the close of business on 10/31 which was recorded by the bank on 11/1: $10,000 A customer sent $15,000 directly to the bank that had not yet been recorded in the company's cash balance The following checks were sent out by the accounting department and have not yet cleared the bank: #262 $1,000, #265 $1,500, 11267 $2,300 The bank statement shows a monthly service fee of $400 that has not been recorded in the company's cash balance The company recorded cash received from a customer of $5,200 when the actual amount received and deposited in the bank was $2,500. The company recorded cash received from a customer of $3,000, but the check bounced and the bank reduced the statement balance by the same amount. Prepare the bank reconciliation What is the company's correct cash balance at 10/31/2019?

Answer 1

Bank Reconciliation is a process of identifying the difference that exist between the company's bank balance as per bank statement supplied by bank and cash balance as per company's accounting records.

Trent & Co Bank Reconciliation Oct 31 Amount Amount Particulars Bank Balance Oct, 31 Add: Deposit in Transit $110,000 $10,000 $120,000 $1,000 $1,500 $2,300 Deduct: Outstaning checks # 262 Outstaning checks # 265 Outstaning checks # 267 Total Deduction Adjusted Bank Balance Cash Balance Oct, 31 Add: Collection of Accounts Receivable ($4,800) $115,200 $106,300 $15,000 $121,300 Deduct: Error in posting ($5200-$2500] NSF Check Bank Service Charges Expense Total Deduction Adjusted Book Balance $2,700 $3,000 $400 ($ 6,100) $115,200 Company's correct cash balance at 10/3/2019 $115,200