Question

The cash account of Sheffield Co. showed a ledger balance of $14,104.26 on June 30, 2020. The bank statement as of that date showed a balance of $14,940. Upon comparing the statement with the cash records, the following facts were determined.

1.		There were bank service charges for June of $90.
2.		A bank memo stated that Bao Dai’s note for $4,320 and interest of $129.60 had been collected on June 29, and the bank had made a charge of $19.80 on the collection. (No entry had been made on Sheffield’s books when Bao Dai’s note was sent to the bank for collection.)
3.		Receipts for June 30 for $12,204 were not deposited until July 2.
4.		Checks outstanding on June 30 totaled $7,689.78.
5.		The bank had charged the Sheffield Co.’s account for a customer’s uncollectible check amounting to $911.52 on June 29.
6.		A customer’s check for $324 (as payment on the customer’s Accounts Receivable) had been entered as $216 in the cash receipts journal by Sheffield on June 15.
7.		Check no. 742 in the amount of $491 had been entered in the cash journal as $419, and check no. 747 in the amount of $209.52 had been entered as $2,095.20. Both checks had been issued to pay for purchases and were payments on Sheffield’s Accounts Payable.

Answer 1

Bank Reconciliation

Bank		Books
Balance, June 30	14,940	Balance, June 30	14,104.26
Add:		Add:
Deposit in transit	12,204	Correction of book error	1,921.68
		Bank collection of receivables and interest	4,429.8
Less:		Less:
Outstanding checks	- 7,689.78	NSF check	- 911.52
		Bank service charges	- 90
Adjusted bank balance	19,454.22	Adjusted book balance	19,454.22

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