Question 4 Cash Balance, August 1 10,130 Disbursements in August 33,902 33,400 (

Question

Question 4

Cash

Balance, August 1

10,130  

  Disbursements in August

33,902

33,400  

(a)

Prepare a bank reconciliation dated August 31, 2014, proceeding to a correct balance.

Question 4

Eli Corp. has just received its August 31, 2014 bank statement, which is summarized as follows:
Provincial Bank of Manitoba Disbursements Receipts Balance Balance, August 1 $9,370 Deposits during August $29,100 38,470 Note collected for depositor, including $40 interest 1,070 39,540 Cheques cleared during August $31,940 7,600 Bank service charges 39 7,561 Balance, August 31 7,561
The general ledger Cash account contained the following entries for the month of August:

Cash

Balance, August 1

10,130  

  Disbursements in August

33,902

Receipts during August

33,400  

Deposits in transit at August 31 are $3,700, and cheques outstanding at August 31 total $950. Cash currently on hand at August 31 is $330 and there were postdated cheques from customers (for September 1) in the amount of $560. The bookkeeper improperly entered one cheque in the books at $149.48. The cheque was actually written for $167.48 for supplies (expense) and cleared the bank during the month of August.

Explanation / Answer

(a)

Eli Corporation Bank Reconciliation August 31, 2014, Provincial Bank of Manitoba Particulars Amount $ Amount $ Balance as per bank statement, August 31,2014 7561 ADD: Cash on hand 330 Deposit in transit 3700 4030 11591 Deduct: Outstanding checks 950 Correct cash balance 10641 Balance per books, August 31,2014 ($10,130+$33,400-$33,902) 9628 ADD: Note collected for depositor, including $40 interest 1070 10698 Deduct: Bank Service Charge 39 Understated check for supplies($167.48-$149.48) 18 57 Correct cash balance 10641

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