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 $29,300 debit balance. The company’s May 31 bank statement shows $27,600 on deposit in the bank.

1. The May 31 bank statement lists $190 in bank service charges; the company has not yet recorded the cost of these services.
2. Outstanding checks as of May 31 total $6,500.
3. May 31 cash receipts of $7,100 were placed in the bank’s night depository after banking hours and were not recorded on the May 31 bank statement.
4. In reviewing the bank statement, a $490 check written by Smith Company was mistakenly drawn against Wright’s account.
5. The bank statement shows a $420 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

Answer-:

Bank reconciliation is a company document prepared in order to reconcile difference between balance as per cash book and balance as per bank statement.

Bank Reconciliation Statement:

Calculation of Adjusted cash Balance on 31 May:

Cash Balance: $ 29,300

less: Bank Charges $ (190)

less: NSF Check $ (420)

Adjusted cash Book Balance $ 28,690

Add: Outstanding Checks $ 6,500

Less: Uncleared Checks ($ 7,100)

Revised Cash Book Balance (A) $ 28,090

Bank Statement Balance $ 27,600

Add: Error by Bank   $ 490

Adjusted Bank Balance (B)     $ 28,090

​​​​​Thankyou..........