PROBLEM III The bank statement for Allen Co. indicates a balance of $8,000.00 on

Question

PROBLEM III The bank statement for Allen Co. indicates a balance of $8,000.00 on June 30, 2005. After the journals for June had been posted, the cash account had a balance of S3,675.00. Prepare a bank reconciliation on the basis of the following reconciling items: (a) Cash sales of S342 had been erroneously recorded in the cash receipts journal as S324 (b) Deposits in transit not recorded by bank, S500.00 (c) Bank debit memorandum for service charges, $25.00 d Bank credit memorandum for note collected by bank, $2850, including S50 interest (e) Bank debit memorandum for $218.00 NSF (not sufficient funds) check from alice Bel, a customer (f) Checks outstanding, $2,200.00

Explanation / Answer

BANK RECONCILIATION STATEMENT Balance as per cash account 3675 Balance as per bank statement 8000 Add: Add: Note collected 2800 Deposit in transit 500 500 Interest income 50 8500 Mistake in recording cash sales (342-324) 18 Less: 2868 Less: NSF cheque 218 6543 Cheques outstanding 2200 2200 Bank service charges 25 Adjusted balance as per ledger 243 6300 Adjusted balance as per bank statement 6300

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