Question

bank reconciliation

Bank Reconciliation The following information is available to assist you in preparing a bank reconciliation for Burgoon Enterprises on May 31: a. The balance on the May 31 bank statement is $8,432.11. b. Not included on the bank statement is a $1,250 deposit made by Burgoon Enterprises late on May 31. c. A comparison between the canceled checks returned with the bank statement and the company records indicated that the following checks are outstanding at May 31: No. 123 $23.40 No. 127 145.00 No. 128 210.80 No. 130 78.26 d. The Cash account on the company's books shows a balance of $9,965.34. e. The bank acts as a collection agency for interest earned on some municipal bonds held by Burgoon Enterprises. The May bank statement indicates interest of $465.00 earned during the month f. Interest earned on the checking account and added to Burgoon Enterprises' account during May was $54.60. Miscellaneous bank service charges amounted to $50.00 9. A customer's NSF check in the amount of $176.94 was returned with the May bank statement. h. A comparison between the deposits listed on the bank statement and the company's books revealed that a customer's check in the amount of $123.45 was recorded on the books during May but was never added to the company's account. The bank erroneously added the check to the account of Cancun Enterprises, which has an account at the same bank. The comparison of deposits per the bank statement with those per the books revealed that another customer's check in the amount of $101.10 was correctly added to the company's account. In recording the check on the company's books, however, the accountant erroneously increased the Cash account by $1,011.00 Required: Enter all amounts rounded to the nearest cent.

Answer 1

Solution 1:

Burgoon Enterprises
Bank Reconciliation Statement
May'31
Particulars		Amount
Balance on bank statement		$8,432.11
Additions:
Outstanding Deposit	$1,250.00
Bank Error	$123.45
Total Additions		$1,373.45
Deductions:
Outstanding checks:
Check 123	$23.40
Check 127	$145.00
Check 128	$210.80
Check 130	$78.26
Total Deductions		$457.46
Adjusted bank balance		$9,348.10
Balance in books		$9,965.34
Additions:
Interest earned on bonds	$465.00
Interest earned on account	$54.60
Total Additions		$519.60
Deductions:
Service Charge	$50.00
NSF Check	$176.94
Incorrect recording of customer checks	$909.90
Total Deductions		$1,136.84
Adjusted book balance		$9,348.10

Solution 2:

A bank reconciliation is needed to detect error and omissions in accounting records.