The Betsy Dough Company wants to prepare a bank reconciliation for the month of
ID: 2530206 • Letter: T
Question
The Betsy Dough Company wants to prepare a bank reconciliation for the month of June. When the bank statement for the month of June arrives from the bank, the following steps are performed. The deposits to the bank accounts as recorded on the bank statement, are compared to the deposit slips retained by the company. It is noted that the last deposit, of $400, occurred after banking hours on the day of the bank statement and therefore has not been recorded by the bank on this bank statement. A comparison of the cheques returned with the bank statement and a listing of the cheques written shows that there are cheques outstanding amounting to $1,456 The ending balance in the account, according to the bank statement, is $10,129 whereas in the company's books the ending balance is exactly $9,000. Other information contained on the bank statement, not previously known to the company, includes the following: a note from a customer for $200 has been collected by the bank and credited to our account; a cheque from F. only for S120 previously deposited by us has been returned for lack of sufficient funds; the bank has charged us $25 for its services (this includes a S10 fee for the NSF cheque). A bank reconciliation is prepared; it does not balance. The difference is $18, so a transposition error is looked for (whenever the difference is a multiple of 9, there is a very good chance that there has been an inadvertent exchange of two digits-for example, writing 29 when it should have been 92). An error is found. Cheque number 141 was written for S235 and cleared the bank for $235, but was recorded in the company records as $253. Required 1. Prepare a bank reconciliation for the Betsy Dough Company at June 30, 20xx 2. Prepare the jourmal entry to record afn of the bank reconciliationExplanation / Answer
SOLUTION:
Book Balance $9,000 Bank Balance $10,129
Add: Collection of Customer Note 200 Deposit of June 30 400
Error in recording check no. 141 18
Deduct: NSF check from Frank Ony 120 Outstanding checks 1,456
Bank service charges 25
Adjusted Bank Balance $9,073 Reconciled Balance $9,073
JOURNAL ENTRIES
Debit Credit
June 30 Cash $9,000
Cash 200
Notes Receivable 200
Cash 18
Expense 18
Bank Fees Expense 25
Cash 25
NSF check from Frank Ony 120
Cash 120
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