Question

The following information relates to the month of November for your company.

1 Bank statement balance $9,900
2 Bank statement reflects bank fees for the month $500
3 NSF cheque $7,000 with fee of $40
4 Bank statement reflects paper statement fee $11
5 Bank statement reflects interest earned on balance $22
6 $2,500 note receivable collected by bank and deposited into your company's account. Related bank fee is $40.
7 Your company wrote cheques with total value of $21,000. $3,000 of the cheques written have not cleared the bank. Also, $100 cheques written in previous months have still not cleared the bank.
8 Deposits in transit $3,000
9 The general ledger reflects cash sales of $1,945. The bank statement reflects deposits related to these sales of $1,954. Your company incorrectly recorded $1,945.
10 General ledger cash account reflects $10,000

REQUIRED

Determine the Adjusted balance of the Cash account at the end of the period.

Answer 1

In preparing Bank reconciliation statement, errors and omissions in books are corrected in the books and errors in bank statement are corrected in bank statement

Calculation of adjusted balance of cash account at the end:

Cash balance = $10,000

Less: Bank fees = $500

Less: NSF check = 7040

Less: Fees = 11

Add: Interest earned = 22

Add: Note received less fees = 2460

Add: Error in recording = 9

Adjusted balance = $4,940

Note: Outstanding checks and deposits in transit will be adjusted in bank statement