Wright Company deposits all cash receipts on the day when they are received and

Question

Wright Company deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on May 31, 2015, its Cash account shows a $30,700 debit balance. The company’s May 31 bank statement shows $29,000 on deposit in the bank. a. The May 31 bank statement included a $260 debit memorandum for bank services; the company has not yet recorded the cost of these services. b. Outstanding checks as of May 31 total $7,200. c. May 31 cash receipts of $7,800 were placed in the bank’s night depository after banking hours and were not recorded on the May 31 bank statement. d. In reviewing the bank statement, a $560 check written by Smith Company was mistakenly drawn against Wright’s account. e. A debit memorandum for $280 refers to a $280 NSF check from a customer; the company has not yet recorded this NSF check.

WRIGHT COMPANY Bank Reconciliation May 31, 2015

Bank statement balance Book balance

Add:

Add:

Deduct:

Deduct:

Adjusted bank balance

Adjusted book balance

Explanation / Answer

Balance per Books $30,700

Add O/S Checks :    $7,200

Less Bank ser charge :       (260)

Less deposit in transit :       (7,800)

Less NSF                       :        (280)

Adj Balance per Books      $ 29,560

Balance per Bank                : $29,000
Posting error                         : 560
Adj Balance per Bank          : 29,560

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