Question

The information below relates to the Cash account in the ledger of Tamarisk Company.

Balance September 1—$17,220;		Cash deposited—$64,250.
Balance September 30—$18,344;		Checks written—$63,126.

The September bank statement shows a balance of $17,362 on September 30 and the following memoranda.

Credits				Debits
Collection of $1,962 note plus interest $38		$2,000		NSF check: Richard Nance		$895
Interest earned on checking account		$53		Safety deposit box rent		$73

At September 30, deposits in transit were $4,920, and outstanding checks totaled $2,853.

Prepare the bank reconciliation at September 30. (List items that increase cash balance first. Reconcile cash balance per bank first.)

Answer 1

		Bank reconciliation
		Unadjusted bank balance				17,362
		Add:Deposit in transit				4,920
						22,282
		less:Checks oustanding				2,853
		Adjusted bank balance				19,429
		Unadjusted cash balance				18,344
		Add:
		note collection			2,000
		interest earned			53	2,053
						20,397
		less:
		NSF			895
		rent expense			73	968
		Adjusted cash balance				19,429