On July 31,2014: Redeker Company had a cash balance per books of $6,140. The sta

Question

On July 31,2014: Redeker Company had a cash balance per books of $6,140. The statement from Nashota State Bank on that date showed a balance of $7,690.80. A comparison of the bank statement with the Cash account revealed the following facts. The bank service charge for July was $25. The bank collected a note receivable of Sl:500 for Redeker Company on July 15, plus S30 of interest. The bank made a S10 charge for the collection. Redeker has not accrued any interest on the note. The July 31 receipts of $1,193.30 were not included in the bank deposits for July. These receipts were deposited by the company in a night deposit vault on July 31. Company check No. 2480 issued to T. Laird, a creditor, for S384 that cleared the bank in July was incorrectly entered in the cash payments journal on July 10 for $348. Checks outstanding on July 31 totaled $1,860.10. On July 31, the bank statement showed an NSF charge of $575 for a check received by the company from K. Wagner, a customer, on account. Instructions Prepare the bank reconciliation as of July 31.

Explanation / Answer

Bank Statement Check Book Balance as per Bank Statement $7,690.80 Balance as per check book $6,140 Add: Deposit in transit $1,193.30 $1,193.30 Add: Note receivable colleccted $1,520 $1,520 $8,884.10 $7,660 Less: Outstanding checks $1,860.10 $1,860.10 Less: Bank' Service charges $25            Error in recording of Check $36            NSF check $575 $636 Adjusted Bank Balance $7,024.00 Adjusted Check Balance $7,024

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