Question

Problem 7-15 (Part Level Submission) The cash account of Swifty Corporation shows a ledger balance of $3,963.20 on June 30, 2020. The bank statement as at that date shows a balance of $4,196. When the statement was compared with the cash records, the following facts were determined: 1. There were bank service charges for June of $25. A bank memo stated that a note from Bao Dai for $900 and interest of $40 had been collected on June 29, and the bank had made a charge of $5.00 on the collection. (No entry had been made on Swifty's books when Bao Dai's note was sent to the bank for collection.) 3. Receipts for June 30 of $2,860 were not deposited until July 2. 4. Cheques outstanding on June 30 totalled $2,137.80. 5. On June 29, the bank had charged Swifty Corporation's account for a customer's NSF cheque amounting to $451.00. 6. A customer's cheque for $100 had been entered as $60 in the cash receipts journal by Swifty Corporation on June 15 as a collection on account. Cheque no. 742 in the amount of $481 had been entered in the cash book as $409, and cheque no. 747 in the amount of $58.00 had been entered as $586. Both cheques were issued to pay for cash purchases of equipment. In May 2020, the bank had charged a $28.00 Ayayai Corp. cheque against the Swifty Corporation account. The June bank statement showed that the bank had reversed this charge and corrected its error. (a) Prepare a bank reconciliation dated June 30, 2020, proceeding to a correct cash balance. (List items that increase balance as per bank & books first.) Swifty Corporation Bank Reconciliation June 30, 2020 Balance per bank, June 30 A Add A.

Answer 1

Swifty Corporation
Bank Reconciliation
June 30, 2020
Balance per bank, June 30		$   4,196.00
Add: Deposit in transit		$   2,860.00
Less: Outstanding checks		$   2,137.80
Adjusted bank balance		$   4,918.20
Balance per ledger, June 30		$   3,963.20
Add:
Note collected by bank	$   935.00
Error in recording of cash receipt	$     40.00
Error in recording of check #747 ($586-$58)	$   528.00
Deduct:		$   1,503.00
Bank service charges	$     25.00
NSF Check	$   451.00
Error in recording of check #742 ($481-409)	$     72.00
		$      548.00
Adjusted ledger balance		$   4,918.20

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