Question

EA11. LO 8.6 Using the following information, prepare a bank reconciliation. • Bank balance: $6,988 • Book balance: $6,626 • Deposits in transit: $1,600 • Outstanding checks: $599 and $1,423 • Bank charges: $75 • Bank incorrectly charged the account $75. The bank will correct the error next month. • Check number 2456 correctly cleared the bank in the amount of $234 but posted in the accounting records as $324. This check was expensed to Utilities Expense. EA12. LO 8.6 Prepare the journal entry to reconcile the bank statement in Exercise 8.11.

Answer 1

Solution of the above problem is as under:

EA 11. LO 8.6

Bank Reconciliation Statement
Particulars	Amount ($)
Balance as per Bank Pass Book (Bank Balance)	6988
Add: Deposits in transit	1600
Less: Outstanding Cheques	-2022
Add: Bank Charges debited by Bank	75
Add: Bank Incorrectly debited the account with an amount of $75	75
Less:Difference arised to wrong posting of $324 instead of $234	-90
Balance as per Accounts Book	6626

EA 12 LO 8.6 Journal Entry to reconcile the Bank Statement

S.No	Particulars	Debit ($)	Credit($)
1	Bank A/c Dr.	1600
	To Deposits		1600
	(Being deposits in transit acknowledged)
2	Payments A/c Dr.	2022
	To Bank A/c		2022
	(Being cheques outstanding for payment acknowledged)
3	Bank A/c Dr.	75
	To Bank Charges A/c		75
	(Being Bank charges reversed in order to reconcile the book balance)
4	Bank A/c Dr.	75
	To Suspense A/c		75
	(Being bank incorrectly debited the account now acknowledged)
5	Utility Expenses A/c	90
	To Bank Account		90
	(Being difference arised due to wrong posting of $324 instead of $234 now taken into consideration)