Question

Blossom Food Store used the following information in recording its bank reconciliation for the month of April. Balance per books April 30 Balance per bank statement April 30 $870 $13,100 (1) (2) (3) (4) (5) Checks written in April but still outstanding $6,600. Checks written in March but still outstanding $4,200. Deposits of April 30 not yet recorded by bank $4,600. NSF check of customer returned by bank $750. Check No. 210 for $694 was correctly issued and paid by the bank but incorrectly entered in the cash payments journal as payment on account for $649. Bank service charge for April was $45. A payment on account was incorrectly entered in the cash payments journal and posted to the accounts payable subsidiary ledger for $814 when Check No. 318 was correctly prepared for $184. The check cleared the bank in April. The bank collected a note receivable for the company of $6,000 plus $240 interest revenue. (6) (7) (8) Prepare a bank reconciliation at April 30.

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. Blossom Food Store Bank Reconciliation Apr 30 Particulars Amount Amount Bank Balance Apr, 30 $13,100 Add: Deposit in Transit $4,600 $17,700 Deduct: Outstaning checks ($6600+$4200] $10,800 Total Deduction ($10,800) Adjusted Bank Balance $6,900 Cash Balance Apr, 30 $870 Add: Collection of Note Receivable $6,000 Interest on note receivable $240 Error in posting ($814-$184] $630 $6,870 $7,740 Deduct: Error in posting ($694-$649] $45 NSF Check $750 Bank Service Charges Expense $45 Total Deduction ($840) Adjusted Book Balance $6,900