Question

Questions 1: The following information relates to GLASGOW Company: The bank collected a $30,000 note for GLASGOW Company in January, plus interest of $2,500, less a bank collection fee of S500. The collection has not been recorded by GLASGOW Company Deposits in transit on January 31 amounted to $20,000. GLASGOW Company received a $5,000 check from a customer for services provided. The company recorded this check in its books by increasing its cash ledger balance by $500. Upon receiving the check, the bank increased the company's bank balance by $5,000 The cash balance per bank statement on January 31 was $90,000 NSF checks amounted to $8,000. The cash balance per books on January 31 was $81,500. Required: Prepare bank reconciliation at January 31 Exercise 2: The following information pertains to Manar Company: The cash balance per bank statement on December 31 was $55,405. The cash balance per books on December 31 was $51,810. Deposits in transit on December 31 amounted to $2,000. Bank charges were $200 The bank collected a $5,500 note for Manar Company in December, plus interest of $200. The collection has not been recorded by the company, and no interest has been accrued Outstanding checks on December 31 was $500 The company received a $450 check from a customer for services provided. The company correctly recorded this check in its books by increasing its cash balance by S450. The bank accidentally recorded the $450 check as $45 You are required to prepare the Bank Reconciliation as on December 31.

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 Glasgow Company Bank Reconciliation Ans 1 Ans 2 Manar Company Bank Reconciliation Jan 31 Dec 31 Particulars Bank Balance Jan, 31 Add: Deposit in Transit Particulars Bank Amount Amount Amount Amount $90,000 Balance Dec, 31 $55,405 Add: Error in Posting [$450-$45] $20,000 $110,000 $405 $2,000 $2,405 Deposit in Transit Deduct: $57,810 Deduct Total Deduction Adjusted Bank Balance Outstanding Check Total Deduction Adjusted Bank Balance Cash $0 $110,000 $500 ($500) Cash $57,310 Balance Jan, 31 $81,500 Add: Balance Dec, 31 $51,810 Add: Collection of Note Receivable $30,000 $2,500 $4,500 $5,500 $200 Interest on note receivable Collection of Note Receivable $37,000 $118,500 Error in posting [$5000-$5001 Interest on note receivable $5,700 $57,510 Deduct: Deduct: $8,000 $500 NSF Check NSF Check Bank Service Charges Expense Total Deduction Adjusted Book Balance Bank Service Charges Expense Total Deduction Adjusted Book Balance $200 ($8,500) $110,000 ($200) $57,310