AP7-4A The bank portion of the bank reconciliation for Backhaus Company at Novem

Question

AP7-4A
The bank portion of the bank reconciliation for Backhaus Company at November 30, 2011, was as follows.


BACKHAUS COMPANY
Bank Reconciliation

November 30, 2011

Cash balance per bank $7,183.95
Add: Deposits in transit

1,265.10
8,449.05

Less: Outstanding checks
Check Number Check Amount
3451 $1,130.20
3470 360.05
3471 422.25
3472 713.40

3474


525.00


3,150.90
Adjusted cash balance per bank

$5,298.15

The adjusted cash balance per bank agreed with the cash balance per books at November 30. The December bank statement showed the following checks and deposits.


Bank Statement

Checks


Deposits
Date Number Amount Date Amount
12-1 3451 $1,130.20 12-1 $1,265.10
12-2 3471 422.25 12-4 605.80
12-7 3472 713.40 12-8 1,182.55
12-4 3475 820.35 12-16 1,336.35
12-8 3476 650.00 12-21 1,472.50
12-10 3477 1,065.00 12-26 1,283.65
12-15 3479 1,540.00 12-29 1,418.00
12-27 3480 300.00 12-30 512.50
12-30 3482 237.75 Total

$9,076.45

12-29 3483 570.00
12-31 3485 270.40


$7,719.35


The cash records per books for December showed the following.


Cash Receipts

Cash Payments Journal
Journal
Date Number Amount Date Number Amount Date Amount
12-1 3475 $820.35 12-20 3482 $237.75 12-3 $605.80
12-2 3476 650.00 12-22 3483 570.00 12-7 1,182.55
12-2 3477 1,065.00 12-23 3484 399.00 12-15 1,336.35
12-4 3478 310.65 12-24 3485 225.40 12-20 1,477.00
12-8 3479 1,540.00 12-30 3486 944.75 12-25 1,283.65
12-10 3480 300.00 Total

$7,466.60
12-28 1,418.00
12-17 3481 403.70 12-30 512.50
12-31 845.20
Total

$8,661.05


The bank statement contained two memoranda:
1. A credit of $2,072.50 for the collection of a $2,000.00 note for Backhaus Company plus interest of $80.00 and less a collection fee of $7.50. Backhaus Company has not accrued any interest on the note.
2. A debit of $286.40 for an NSF check written by D. Chagnon, a customer. At December 31, the check had not been redeposited in the bank.

At December 31 the cash balance per books was $6,242.60, and the cash balance per the bank statement was $10,077.15. The bank did not make any errors, but two errors were made by Backhaus Company.

Explanation / Answer

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