Question

Homework Question: - Abdulla Company deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on July 31, 2018, its Cash account shows an $25,500 debit balance. Abdulla Company's July 31 bank statement shows $21,646 on deposit in the bank. Prepare a bank reconciliation for Abdulla Company using the following information: a) The July 31 bank statement included a $90 debit memorandum for bank services b) Check No. 123, listed with the canceled checks, was correctly drawn for $1,437 in payment of a utility bill on July 15. Abdulla Company mistakenly recorded it with a debit to Utilities Expense and a credit to Cash in the amount of $1.473. c) In reviewing the bank statement, a $2,200 check written by Ayesha Company was mistakenly drawn against Abdulla's account. d) Outstanding checks as of July 31 total $1,400. e) A debit memorandum for $1,300 refers to a $1,300 NSF check from a customer; the company has not yet recorded this NSF check in the cashbook ) The June 30 cash receipts of $1,700 were placed in the bank's night depository after banking hours and were not recorded on the July 31 bank statement. Required: Show adjusted balance in cash book and prepare a bank reconciliation statement.

Answer 1

Balance as per books	$               25,500	Balance as per bank	$           21,646
Add :		Add:
Check recorded in excess	$                       36	Check mistakenly recorded by bank	$              2,200
		Deposit in transit	$              1,700
	$               25,536		$           25,546
Less :		Less :
Service Charges	$                       90	Outstanding Checks	$              1,400
NSF Check	$                 1,300
Adjusted Balance as per books	$               24,146	Adjusted Balance as per bank	$           24,146