Branson Co. received its bank statement for the month ending May 31, 2013, and r

Question

Branson Co. received its bank statement for the month ending May 31, 2013, and reconciled the statement balance to the May 31, 2013, balance in the Cash account. The reconciled balance was determined to be $9,300. The reconciliation recognized the following items: 1. A deposit made on May 31 for $5,100 was included in the Cash account balance but not in the bank statement balance. 2. Checks issued but not returned with the bank statement were No. 673 for $1,470 and No. 687 for $2,550. 3. Bank service charges shown as a deduction on the bank statement were $120. 4. Interest credited to Branson Co.'s account but not recorded on the company's books amounted to $72. 5. Returned with the bank statement was a "debit memo" stating that a customer's check for $960 that had been deposited on May 23 had been returned because the customer's account was overdrawn. 6. During a review of the checks that were returned with the bank statement, it was noted that the amount of check No. 681 was $480 but that in the company's records supporting the Cash account balance, the check had been erroneously recorded in the amount of $48.

Explanation / Answer

Work it backwards

(Step -1). Reconciliation for the Branson Cash account

The answer to step 1 is 9876 ( 9300-432-72+960+120)

(Step 2) Reconciliation of the Bank balance

The answer to step 2 is 180(9300-5100+4020)

Balance as per cash account 9876 Less bank charges 120 item 3 Less returned checks 960 item 5 Add interest earned 72 item 4 Add difference in check recorded in error
(480-48) 432 item 6 Adjusted balance of cash account 9300

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