Question

Question #2

You have been asked to reconcile the bank account for Virdon Electric Ltd. for the month ended September 30. You have been given the following information:

Balance per bank statement, September 30 $4,481.90

Balance per General Ledger, September 30                            $4.500.00

a).Cheque #755 was outstanding, i.e. not cashed by bank in the amount of $221.00 as of September 30.

b).Cheque #860, dated September 12, was written and cashed for $484.00. However, this cheque was recorded incorrectly in the cash disbursements journal as $448.00 and debited to Accounts Payable.

c).Cheque #882, dated September 24, was written and cashed for $75.00. This cheque was incorrectly recorded in the cash disbursements journal as $750.00 and debited to Equipment.

d).The deposit made on the evening of September 30, in the amount of $2,750.00, was not on the September bank statement.

e). A bank debit memo was received with the bank statement indicating that there were service charges in the amount of $8.60 for the month of September.

f). A cheque in the amount of $325.00, written against the account of Vardon Selectric Ltd., was cashed in error by the bank on the account of Virdon Electric Ltd.

g). The bank statement showed a debit of $185.00 on September 28 for a customer's cheque which had been returned as NSF This cheque had been included in the deposit of September 21.

h). Cheques totaling $2,390.50, which were written during September, had not been cashed by the bank.

Required:

Prepare the bank reconciliation for the month of September. Show all your workings and all the items that you are using for the

Answer 1

Solution

Question #2

Virdon Electric Ltd. Bank Reconciliation For the month ended September 30 Bank: Balance as per Bank statement $ 4,481.90 Add: (d) Deposits in Transit $ 2,750.00 (f) Correction of bank error $ 325.00$ 3,075.00 Subtotal $ 7,556.90 Less: Outstanding Checks Check No: (a) #755 $ 221.00 (h) Other checks $ 2,390.50 $ 2,611.50 Adjusted Bank Balance $ 4,945.40 $ Books: Balance as per General Ledger Add: (c) Correction of check #882 Subtotal Less: (b) Correction of check #860 (g) NSF check returned by bank (e) Bank Service charges Adjusted Book Balance $ 4,500.00 675.00 $ 675.00 $ 5,175.00 36.00 $ $ 185.00 $ 8.60 $ 229.60 $ 4,945.40