Question

Chapter 06 Homework Saved Required information [The following information applies to the questions displayed below.] Part 1 of 2 The following information is available to reconcile Branch Company's book balance of cash with its bank statement cash balance as of July 31. points eBook Print a. On July 31, the company's Cash account has a $24,752 debit balance, but its July bank statement shows a $27,217 cash balance. b. Check No. 3031 for $1,580 and Check No. 3040 for $782 were outstanding on the June 30 bank reconciliation. Check No. 3040 is listed with the July canceled checks, but Check No. 3031 is not. Also, Check No. 3065 for $566 and Check No. 3069 for $2,348, both written in July, are not among the canceled checks on the July 31 statement. c. In comparing the canceled checks on the bank statement with the entries in the accounting records. It is found that Check No. 3056 for July rent expense was correctly written and drawn for $1,280 but was erroneously entered in the accounting records as $1,270. d. The July bank statement shows the bank collected $9,500 cash on a noninterest-bearing note for Branch, deducted a $48 collection expense, and credited the remainder to its account. Branch had not recorded this event before receiving the statement. e. The bank statement shows an $805 charge for a $795 NSF check plus a $10 NSF charge. The check had been received from a customer, Evan Shaw. Branch has not yet recorded this check as NSF. f. The July statement shows a $14 bank service charge. It has not yet been recorded in miscellaneous expenses because no previous notification had been received. g. Branch's July 31 daily cash receipts of $10,652 were placed in the bank's night depository on that date but do not appear on the July 31 bank statement. References Required: 1. Prepare the bank reconciliation for this company as of July 31. BRANCH COMPANY Bank Reconciliation July 31 Book balance Add: Bank statement balance Add: Deduct: Deduct: Adjusted bank balance Adjusted book balance

Answer 1

Bank Reconciliation is a process of identifying the difference that exist between the company's bank balance as per bank statement supplied by bank and cash balance as per company's accounting records.

Amount Amount Amount $24,752 Particulars Bank Statement Balance Add: Deposit in Transit $9,452 Branch Company Bank Reconciliation July 31, 2017 Amount Particulars $27,217 Book Balance Add: Bank Collection of Note Receivable of $9500 less collection charges of $48 $37,869 Deduct: Error in posting ($1280-$1270] NSF Check NSF Charge Bank Service Charge ($4,494) Total Deduction $33,375 Adjusted Book Balance $9,452 $34,204 Deduct: Outstanding Check 3031 Outstanding Check 3065 $1,580 $566 $10 $795 $10 $14 $2,348 Outstanding Check 3069 Total Deduction Adjusted Bank Balance ($829) $33,375 Debit Credit Date July 31 SO $0 July 31 S10 $10 July 31 Particulars No Entry required No Entry required (No entry required outstanding checks) Rent Expense Cash (To record rectification entry) Cash Bank Charges Notes Receivable (To record collection of note receivable) Accounts Receivable Cash (To Record NSF check) Bank Charges Cash ( To Record Bank Service Charge) $9,452 $48 $9,500 July 31 $805 $805 July 31 $14