Question

Ayayai Corp. deposits all receipts intact and makes all payments by cheque. The following information is available from the cash records: Balance per bank Add: Deposits in transit Deduct: Outstanding cheques Balance per books April 30 Bank Reconciliation $7,100 1,500 (2,000) $6,600 Month of May Results Balance on May 31 May deposits May cheques May note collected (not included in May deposits) May bank service charge May NSF cheque from a customer, returned by the bank (recorded by the bank as a charge) Per Bank Per Books $8,700 $9,540 4,500 5,500 4,000 3,000 1,000 20 320 Determine the amount of deposits in transit and outstanding cheques at May 31. Keeping in mind the time lag between deposits and cheques being recorded in the books and when they are recorded by the bank. Deposits in transit, May 31 $ Outstanding cheques, May 31 $ SHOW LIST OF ACCOUNTS LINK TO TEXT Prepare a May 31 bank reconciliation showing balance per bank statement and balance per books and correct cash balance. (List items that increase balance as per bank & books first.) Ayayai Corp. Bank Reconciliation May 31

Answer 1

Ayayai Corp.
Bank Reconciliation
May'31
Balance Per Bank Statement, May 31	$8,700
Add: Deposits In Transit (1500+5500-4500)	$2,500
Less: Outstanding Checks (2000-4000+3000)	($1,000)
Correct Cash Balance, May 31		$10,200
Balance Per Books, May 31	$9,540
Add: Collection Of Note	$1,000
Less: Bank Service Charge	($20)
Less: NSF Check	($320)
Corrected Cash Balance, July 31		$10,200
Journal Entry
Account Titles And Explanation	Debit	Credit
Cash (BF)	$660
Bank Charges Expense	$20
Accounts Receivable	$320
Notes Receivable		$1,000