Question

Dorian Company’s records showed the following information for the month of March 2020:

Unadjusted Cash balance per Bank Records at March 31: $7,000.

Unadjusted Cash balance per Books at March 31: $5,659

(1) Outstanding Deposits (deposits in transit): $6,000 (This means the deposits have been

recorded by Dorian, but have not yet been recorded by the bank.)

(2) The bank statement shows check printing charges of $40.

(3) Dorian Company used Check #114 to pay a wholesale supplier $248. Although Dorian

Company correctly prepared the check for $248 in making its payment, the company

incorrectly recorded the check as $329 in its cash payments journal (company log of

outgoing checks).

(4) Outstanding checks (checks in transit): $5,800 (This means that the company wrote the

checks to pay obligations and the recipients have not cash the checks. As a result, the bank

is not aware of the checks and has not yet recorded Dorian’s outgoing checks.)

(5) The bank returned an NSF check from a customer for $560.

(6) The bank statement showed that a $2,000 note was collected and interest on the note was

$60. (In total, $2060 was deposited in Dorian Company’s account from the collection of the

note and the related interest.)

Instructions

Prepare a bank reconciliation for Dorian Company at March 31, 2020.

Answer 1

Bank Reconciliation

Balance as per bank

$   7,000.00

Balance as per books

$   5,659.00

Add:

Deposits in transit

$   6,000.00

Add:

Check in transit

$   5,800.00

Adjusted balance as per bank

$ 13,000.00

Less:

NSF checks

$     (560.00)

Less:

Printing Charges

$       (40.00)

Add:

Collection of the note and related interest

$   2,060.00

Add:

Incorrectly recorded check

$        81.00

Adjusted balance as per books

$ 13,000.00