Question

PRO m 6-1 Bank Reconciliation information is available to assist you in preparing a bank reconciliation for Calico The following Corners on May 31 LO2 on the May 31 bank statement is $8,432.11 included on the bank statement is a $1,250 deposit made by Calico Corners late on May 31 son between the canceled checks returned with the bank statement and the comm records indicated that the following checks are outstanding at May 31 pany No. 123 No. 127 No. 128 No. 130 $ 23.40 45.00 210.80 67.32 The Cash account on the company's books shows a balance of $9,965.34. Comers. The May bank statement indicates interest of $465.00 carned during the month. was $54.60. Miscellaneous bank service charges amounted to $50.00 t. The bank acts as a collection agency for interest earned on some municipal bonds held by Calico fInterest carned on the checking account and added to Calico Corners' account during May A customer's NSF check in the amount of $166.00 was returned with the May bank statement. comparison between the deposits listed on the bank statement and the company's books revealed that a customer's check in the amount of $123.45 was recorded on the books during lay but was never added to the company's account. The bank erroneously added the check the account of Calico Closet, which has an account at the same bank. The comparison of deposits per the bank statement with those per the books revealed that nother customer's check in the amount of $101.10 was correctly added to the company's acount. In recording the check on the company's books, however, the accountant errone ously increased the Cash account by $1,011.00. Required Prepare a bank reconciliation in good form. Record the cillation prepared in part (1) above e necessary journal entries on the company's books resulting from the bank recon- end says to you: "I don't know why companies bother to prepare bank reconciliations-it a waste of time. Why don't they just do like I do and adjust the Cash account for any dif between what the bank shows as a balance and what shows up in the books" Explain to tnend why a bank reconciliation should be prepared as soon as a bank statement is received. fri erence LO4

Answer 1

Answe repare bank econtiation in hoform. Bank Reconli on glaleme Add:Depo 1250.00 {es!! Checklissued but not presented 字UL16-62 Adj:ted Bank Patano 91359-04 Eatance as perCoh Book 9,65.3L Add Inteest Collecird yb5.00 'Interest Credited $51460 $.519.&D tess Ronk cho NISF Check tnd 166 0D Cushme' chock Liontrenteved +imo 909.90 11,115.90 Adjux-Hrd Cachalant ,351.0 50.0D to, .OL 90.00 1125. Go book! Itrest revenue 560

3 M s cellaneous expense 亨50.00 (ash 率1125-90. In Cash atiount o onu differene behoein that tho lank shous 0 o balanu and wh shoss up in t y a a bunk vecon cliabon Shodd repoe Bank.犾conciliatan not be pepared, periodially Gences and the sare chould tnot netessarn tho te exror Cnsh book. Thore n be enyo Can be onl Companu in bank Analso and lhe same shauld Cosvetled fron bak ke