Foreman Corp. prepares monthly bank reconciliations of its checking account bala
ID: 2353438 • Letter: F
Question
Foreman Corp. prepares monthly bank reconciliations of its checking account balance.The Bank Statement for May, 2005, indicated the following:
Bank balance, May 31, 2005 $16,117
Service charge for May $37
Interest earned during May $30
NSF check from Valerie Corp. (deposited by Foreman) $100
Note ($3,000) and interest ($296) collected for Foreman from a customer of Foreman's $3,296
Other pertinent info:
Book balance per Foreman's books (unadjusted) $11,555
Outstanding checks as of May 31 $4,315
Deposit in transit at May 31 $2,852
Error in recording check # 4456 issued by foreman (book error) Foreman needs to subtract this amount from their books. $90
The correct amount of check #4456 is $760. It was recorded as a cash disbursement of $670 by mistake. The check was issued to pay for merchandise purchases. The check appeared on the bank statement correctly.
A.prepare a bank reconciliation schedule at May 31, 2005.
Explanation / Answer
Balance per bank
16,117
Add:
Deposit in transit
2852
18,969
Deduct:
Outstanding checks
4315
Adjusted bank balance
14,654
Balance per books
11,555
Add:
Interest earned
30
Note plus interest collected
3296
3326
14,881
Deduct:
Service charge
37
NSF check
100
Error
90
227
Adjusted book balance
14,654
Balance per bank
16,117
Add:
Deposit in transit
2852
18,969
Deduct:
Outstanding checks
4315
Adjusted bank balance
14,654
Balance per books
11,555
Add:
Interest earned
30
Note plus interest collected
3296
3326
14,881
Deduct:
Service charge
37
NSF check
100
Error
90
227
Adjusted book balance
14,654
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