Consider the following facts for Company A: Cash account balance per the general

Question

Consider the following facts for Company A: Cash account balance per the general ledger at May 31 = $13,287. Cash account balance per the bank statement at May 31 = $14,157. The bank statement included a debit memo of $35 for check printing charges. Cash sales of $1,720 on May 12 were deposited in the bank. The deposit was incorrectly recorded in Company A books for $1,820. The bank credited the cash account for the correct amount. At May 31, outstanding checks totaled $1,225. At May 31, deposits in transit totaled $2,100. On May 18, Company A issued check #1181 for $191 to Company B for payment on account. The check cleared the bank in May, but was incorrectly recorded by Company A on its books for $119. A $4,000 not receivable was collected by the bank for Company A on May 31 plus interest of $80. The bank charged a collection fee of $20. No interest had been accrued by Company A for the note. In the cancelled checks received with the bank statement, there was check for $800 issued by another company and incorrectly charged to Company A by the bank. On May 31, the bank statement showed an NSF charge of $1,308 for a check issued by a customer to Company A as payment on account. Company A's bank reconciliation for May 31, 2014 should show an adjusted Cash account balance of $

Explanation / Answer

The bank reconciliation has been given below:

Company A's bank reconciliation for May 31, 2014 should show an adjusted Cash Account balance of $15,832 (which is Option E)

Balance as Per Books/General Ledger 13,287 Add Note Receivable and Interest Collected by the Bank 4,080 Less Check Printing Charges -35 Error in Recording Deposit Corrected (1,820 – 1,720) -100 Error in Recording Check Corrected (191 – 119) -72 Bank Interest -20 NSF Charge -1308 Adjusted Balance as Per Books $15,832

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