Hank Brock owns a card shop, Four Aces. The following cash information is availa

Question

Hank Brock owns a card shop, Four Aces. The following cash information is available for the month of August 2014. As of August 31, the bank statement shows a balance of $11,680. The August 31 unadjusted balance in the Cash account of Four Aces is $7,953. A review of the bank statement revealed the following information: 1. A deposit of $1,720 on August 31, 2014, does not appear on the August bank statement. 2. It was discovered that a check to pay for baseball cards was correctly written and paid by the bank for $4,095 but was recorded on the books as $4,995. 3. When checks written during the month were compared with those paid by the bank, three checks amounting to $4,585 were found to be outstanding. 4. A debit memo for $38 was included in the bank statement for the purchase of a new supply of checks. Required Prepare a bank reconciliation at the end of August showing the true cash balance.

Explanation / Answer

Bank Reconciliation Statement

Particulars Amount Balance as per cash account 7953 Less: Deposit of cash not in bank statement 1720 Add: Cheques required excessively in books 900 Add: Ceques issued but not paid 4585 Less: Charges debited by bank only 38 Balance as per bank statement 11680

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