Question

1-5 please

On October 31st, the Company's general ledger shows $88,000 for the checking account balance. The company's cash receipts for the month which haven't cleared the bank yet are $20,000 and checks written by the company this month which have not cleared the bank total $35,000. While comparing the bank statement with the general ledger the company determined the bank overcharged the company $1,000 for a check the company wrote. The bank statement also reported service fees of $50, interest earned on their account of $15, and an automatic withdrawal of $900 for the phone bill. The bank statement also showed the bank had collected a $3,000 note receivable for the company. The company noted that one of the checks they wrote was incorrectly recorded in the general ledger, it was written for $560 but they had subtracted $650 from their checking account. The bank statement reported the company checking account balance was $104,155 on October 31st. Answer the following based on performing a bank reconciliation for the Company. 1. How should the company treat the bank error? (add/sub from bank/general ledger) 2. How should the company treat the company error? (add/sub from bank/ general ledger) 3. What is the general ledger cash balance before reconciliation? $_ 4. What is the bank statement balance before reconciliation? $_ 5. What is the general ledger balance after reconciliation? $_

Answer 1

1.	add to bank	1,000 has been overcharged now needs to be added
2.	add to general ledger	90 over-subtracted
3.	88000	(given)
4.	104155	(given)
5.	90155	(shown below)

Bank balance	104155	General ledger	88000
Add:		Add:
Deposit in transit	20000	Interest revenue	15
Error	1000	Note collection	3000
		Error	90
Less:		Less:
Outstanding checks	-35000	Bank fees	-50
		Automatic withdrawal	-900
Adjusted bank balance	90155	Adjusted general ledger	90155