The bank statement for the checking account of Youve got mail(YGM) showed a Dece

Question

The bank statement for the checking account of Youve got mail(YGM) showed a December 31, 2016, balance of $14,632.12. Information that might be useful in preparing a bank reconciliation is as follows:

1. Outstanding checks were $1,320.25

2. The December 31, 2016 cash receipts of $575 were not deposited in the bank until January 2, 2017

3. One check written in payment of rent for $246 was correctly recorded by the bank but was recorded by YGM as a $264 disbursement

4. In accordance with prior authorization, the bank withdrew $450 directly from the checking account as payment on a mortgage note payable. The interest portion of that payment was $350. YGM has made no entry related to this automatic payment

5. Bank service charge of $14 were listed on the bank statment

6. A deposit of $875 was recorded by the bank on December 13, but it did not belong to YGM. The deposit should have been made to another checking account

7. The bank statement included a charge of $85 for an NSF check. The check was returned with the bank statement and the company will seek payment from the customer

8. According to instructions from YGM on December 30, the bank withdrew $10,000 from the account and purchased US Treasury bill for the company. YGM recorded the transaction in its books on December 31 when it received notice from the bank

Prepare the bank reconciliation for YGM at December 31, 2016. You will have to compute the balance per books.

Explanation / Answer

Answer:

First of all we need to compute the balance per books.

Calculation for the compute the balance per books.

Balance as per bank statement

14632.12

Add: Deposit outstanding

575

Less: Check outstanding

-1320.25

Less: Error in recording rent Check (246-264)

-18

Add: automatic mortgage payment

450

Add: Bank service charge

14

Less:

Deposit account companies account in error

-875

Add: NSF check

85

Balance as per book

13542.87

Now we will prepare the bank reconciliation as under

Balance as per bank statement

14632.12

Add:Deposite outstanding

575

Less:

Wrongly credited To YGM

-875

Check outstanding

-1320.25

Corrected balance

13011.87

Balance as per book

13542.87

Add: Error in recording rent Check (264-246)

18

Less:

Automatic mortgage Note payment

-450

Bank service charge

-14

NSG Check

-85

Corrected balance

13011.87

Balance as per bank statement

14632.12

Add: Deposit outstanding

575

Less: Check outstanding

-1320.25

Less: Error in recording rent Check (246-264)

-18

Add: automatic mortgage payment

450

Add: Bank service charge

14

Less:

Deposit account companies account in error

-875

Add: NSF check

85

Balance as per book

13542.87

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.