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The bank account as a control device helps to protect cash. One of the requiremn

ID: 2378286 • Letter: T

Question

The bank account as a control device helps to protect cash.  One of the requiremnets is to conduct periodic bank statement reconciliaitons.  Using the following data, complete the bank statement reconciliation.

Prepare a bank reconciliation using B&B's Restaurant Supply Inc Information

- ANSF check from Johny Jones for $3,164

- Two deposits made on August 31 were not on the bank statement, totaling $2,897

- August 31 balance in Cash was 2,005

- The owner had written check #1598 for $500 and recorded this check as $5000

- The balance on the bank statement as of August 31 wa $5316

-Bank service charge of $28 was shown on the bank statement

-Checks #1572, 1606, 1116 and 1242 for $419, $126, $650, and $1,105 were not shown on bank statement even though the company had sent the checks

Explanation / Answer

BANK BALANCE: $5,216


Add: Deposits in transit $2,897

Less: Outstanding Checks $2,300


Adjusted bank balance = $5,813



BOOK BALANCE $1,905


Less: NSF Check $3,164

Add: Rent collected $2,600

Add: Error in recording check $4,500

Less; Bank Service charge $28


ADJUSTED BOOK BALANCE: $5,813

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