Question

Wright Company deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on May 31, 2017, its Cash account shows a $30,900 debit balance. The company’s May 31 bank statement shows $29,200 on deposit in the bank. The May 31 bank statement lists $270 in bank service charges; the company has not yet recorded the cost of these services. Outstanding checks as of May 31 total $7,300. May 31 cash receipts of $7,900 were placed in the bank’s night depository after banking hours and were not recorded on the May 31 bank statement. In reviewing the bank statement, a $570 check written by Smith Company was mistakenly drawn against Wright’s account. The bank statement shows a $260 NSF check from a customer; the company has not yet recorded this NSF check. Prepare a bank reconciliation for the company using the above information.

Answer 1

Wright Company
Bank Reconciliation
May 31, 2017
Bank statement balance		$ 29,200	Book balance		$ 30,900
Additions:
Deposit in transit	$ 7,900		Deduct:
Bank error	$     570		NSF Check	$ 260
		$    8,470	Bank Service charges	$ 270
Deduct:Outstanding checks		$    7,300			$        530
Adjusted bank balance		$ 30,370	Adjusted book balance		$ 30,370

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