Question

Johnson Corporation's bank statement for October reports an ending balance of $21.207, whereas Johnson's cash account shows a balance of $20,71 on October 31 The following additional Information is available: a. A 5795 deposit made on October 31 was not recorded by the web b. At the end of October, outstanding ches to $1.222 The bank statement shows bank service charges of $125 not yet recorded by the company d. The company erroneously recorded as $973 a check that had to correctly processed by the bank e. A 5480 check from a customer, deposited by the company on er 23, was reed the bankment for lack of funds Required: 1. Prepare the October bank reconciliation for Johnson Corporation Johnson Corporation Bank Reconciliation Schedule October 31 Cash balance from bank statement Add: Deposit in transit Less: Outstanding checks Adjusted cash balance Cash balance from company records Add Error in recording check Less: Service charge NSF check Care Adjusted cash balance Chew more Check My Workommning. Sme for Grading T Y с 11 G S F 3 D B N 3 26 command

Answer 1

Johnson Corporation

Bank reconciliation Statement

october,31

PARTICULARS	AMOUNT ($)
Cash Balance from bank Statement	21207
Add: Deposit in Transit	795
Less : Outstanding checks	-1222
Adjusted cash Balance	20780
Cash Balance From Company record	20791
Add : Error in recording check	594
Less : Service chrgs	-125
Less : NSF Checks	-480
Adjusted Cash Balance	20780

Reason :

a.) deposit of $795 not recorded by bank but it is recorded by company so we have add this in bank statement bal. so that it can match with company cash balance.

b.) outstanding checks of $1222 oustanding not recorded by bank but it is deducted from cash balance of  company so we have to deduct this from bank statement balance so that it can match with company cash balance.

c.) Service charges of $125 deducted by bank and also record in bank statement but not record by company in cash balance. For matching with bank statement balance company have to deduct tis charges from company's cash balance

d.) error in recording of checks by company of $594 (973 - 379) but bank record correct amount so company's cash balance understated by $594 for matching company's cash balance with bank statement we have add back $594 in company's cash balance.

e.) a check of $480 from customer but this check get dishonoured, but company record deposit but didnot reverse it. In bank statement there no entry passed regarding this check due dishonouring of check. now, company have to less $480 from cash balance.