Question

Whispering Winds Spa shows a general ledger balance for the Cash account of $4,169.35 on June...

Whispering Winds Spa shows a general ledger balance for the Cash account of $4,169.35 on June 30 and the bank statement as of that date indicates a balance of $4,195.00. When the statement was compared with the cash records, the following facts were determined:
1. There were bank service charges for June of $23.00.
2. A bank memo stated that Bao Dai’s note for $906.00 and interest of $51.00 had been collected on June 29, and the bank had charged $4.50 for the collection. Any interest revenue has not been accrued.
3. Deposits in transit June 30 were $2,950.00.
4. Cheques outstanding on June 30 totalled $2,081.05.
5. On June 29, the bank had charged Whispering Winds Spa’s account for a customer’s NSF cheque amounting to $528.20.
6. A customer’s cheque received as a payment on account of $99.00 had been entered as $76.00 in the cash receipts journal by Whispering Winds Spa on June 15.
7. Cheque no. 742 in the amount of $505.00 had been entered in the books as $455.00, and cheque no. 747 in the amount of $30.70 had been entered as $551.00. Both cheques were issued as payments on account.
8. In May, the bank had charged a $33.50 Wella Spa cheque against the Whispering Winds Spa account. The June bank statement indicated that the bank had reversed this charge and corrected its error.

Prepare a bank reconciliation at June 30. (List items that increase balance as per bank & books first. Round answers to 2 decimal places, e.g. 52.75.)

Whispering Winds Spa
Bank Reconciliation
June 30

Bond interest collected by bankDeposits in transitError in recording depositAdjusted cash balance, June 30 per bankBank service chargesError on cheque no. 745Error on cheque no. 747Outstanding chequesNote collectionNSF chequeBalance per bank, June 30Error on cheque no. 742

 $

AddLess

:

Error on cheque no. 742Error in recording depositNote collectionBank service chargesBond interest collected by bankAdjusted cash balance, June 30 per bankDeposits in transitNSF chequeBalance per bank, June 30Error on cheque no. 745Outstanding chequesError on cheque no. 747

AddLess

:

Error on cheque no. 745Balance per bank, June 30Error on cheque no. 747NSF chequeAdjusted cash balance, June 30 per bankDeposits in transitError in recording depositNote collectionError on cheque no. 742Bank service chargesBond interest collected by bankOutstanding cheques

Bond interest collected by bankBalance per bank, June 30Error in recording depositError on cheque no. 745Deposits in transitBank service chargesOutstanding chequesAdjusted cash balance, June 30 per bankError on cheque no. 747Note collectionNSF chequeError on cheque no. 742

 $

Balance per books, June 30Note collectionAdjusted balance, June 30 per booksError in recording depositBank service chargesNSF chequeBond interest collected by bankError on cheque no. 742Error on cheque no. 747Error on cheque no. 745Deposits in transitOutstanding cheques

 $

AddLess

:

    Adjusted balance, June 30 per books    Outstanding cheques    Bond interest collected by bank    Balance per books, June 30    Bank service charges    Error on cheque no. 745    Deposits in transit    Note collection    Error in recording deposit    Error on cheque no. 747    NSF cheque    Error on cheque no. 742    

 $

    Note collection    Deposits in transit    Balance per books, June 30    Error on cheque no. 742    Error on cheque no. 745    NSF cheque    Adjusted balance, June 30 per books    Bond interest collected by bank    Bank service charges    Outstanding cheques    Error in recording deposit    Error on cheque no. 747    

    Bank service charges    Bond interest collected by bank    Error on cheque no. 747    Error in recording deposit    Balance per books, June 30    Note collection    Error on cheque no. 742    NSF cheque    Error on cheque no. 745    Adjusted balance, June 30 per books    Deposits in transit    Outstanding cheques    

AddLess

:

    Error on cheque no. 745    Outstanding cheques    Error on cheque no. 747    Adjusted balance, June 30 per books    Balance per books, June 30    Error in recording deposit    Note collection    Error on cheque no. 742    Deposits in transit    NSF cheque    Bank service charges    Bond interest collected by bank    

    Deposits in transit    Adjusted balance, June 30 per books    Note collection    Balance per books, June 30    Bank service charges    Outstanding cheques    Error on cheque no. 742    Error in recording deposit    Bond interest collected by bank    Error on cheque no. 745    NSF cheque    Error on cheque no. 747    

    NSF cheque    Balance per books, June 30    Error on cheque no. 742    Error in recording deposit    Error on cheque no. 747    Note collection    Bank service charges    Bond interest collected by bank    Error on cheque no. 745    Outstanding cheques    Adjusted balance, June 30 per books    Deposits in transit    

NSF chequeOutstanding chequesBank service chargesDeposits in transitBalance per books, June 30Error on cheque no. 742Error on cheque no. 747Note collectionAdjusted balance, June 30 per booksError in recording depositBond interest collected by bankError on cheque no. 745

 $
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Homework Answers

Answer #1
Answer

Bank reconciliation:
Unadjusted balance as per Bank statement $4,195.00
Add; Deposit in transit $2,950.00
Less: Outstanding check $2,081.05
Adjusted balance, June 30 per books $5,063.95
Balance as per book, June 30 per books $4,169.35
Add:
Notes collection (906+51-4.5) $952.50
Error in cheque no. 747 (551-30.70) $520.30
Error in deposit (99-76) $ 23.00
$1,495.80
Less:
NSF Check $528.20
Bank service charge $ 23.00
Error in Cheque No. 742 (505-455) $ 50.00
$   601.20
Adjusted balance, June 30 per books $5,063.95
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