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An accounting clerk for Lock-It Co. prepared the following bankreconciliations:

ID: 2457612 • Letter: A

Question

An accounting clerk for Lock-It Co. prepared the following bankreconciliations:

Lock-It Co.

Bank Reconciliation

October 31, 2008

Cash Balance according to company’srecords                                                         $9,305.60

Add: OutstandingChecks                                                     $7,115.35

Error by Lock-It Co. in recording Check

No. 1007 as $4,715 instead of$4,175                                     540.00

Note for $5,000 collect by bank includinginterest              5,375.00                      13,030.35       

                                                                                                                                            $22,335.95

Deduct: Deposit in transit on October31                             $13,690.45

Bank servicecharges                                                                     45.00                     13,735.45       

                                                                                                                                            $8,600.50

Explanation / Answer

                                                     Lock -It co.                                                       Bank Reconciliation                                                  Oct 31,08 Balance Per Companybooks                        9,305.60 Add Note collected by bank      5,375.00 Error in recording check     540.00              5,915.00                                                                 15,220.60 Less Bank servicecharge                                        45.00 Adjusted Book Balance as on oct31st        15,175.60                 Cash balance to report in the balance sheet is $ 15,175.60 Explanation Outstanding checks and deposit in transit are used when reconcilingbank balance to book balance. Here , reconciliation is done by taking book balance to bookbalance.

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