Question

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On October 31, 2021, the bank statement for the checking account of Blockwood Video shows a balance of $13,079, while the company’s records show a balance of $12,356. Information that might be useful in preparing a bank reconciliation is as follows:

1. Outstanding checks are $1,255.
2. The October 31 cash receipts of $810 are not deposited in the bank until November 2.
3. One check written in payment of utilities for $142 is correctly recorded by the bank but is recorded by Blockwood as a disbursement of $412.
4. In accordance with prior authorization, the bank withdraws $455 directly from the checking account as payment on a note payable. The interest portion of that payment is $55 and the principal portion is $400. Blockwood has not recorded the direct withdrawal.
5. Bank service fees of $29 are listed on the bank statement.
6. A deposit of $572 is recorded by the bank on October 13, but it did not belong to Blockwood. The deposit should have been made to the checking account of Hollybuster Video, a separate company.
7. The bank statement includes a charge of $80 for an NSF check. The check is returned with the bank statement, and the company will seek payment from the customer.

Required:

1. Prepare a bank reconciliation for the Blockwood checking account on October 31, 2021. (Amounts to be deducted should be indicated with a minus sign.)

BLOCKWOOD VIDEO
Bank Reconciliation
October 31, 2021
Bank’s Cash Balance		Company’s Cash Balance
Per bank statement		Per general ledger
Bank balance per reconciliation		Company balance per reconciliation

Answer 1

BLOCKWOOD VIDEO
Bank Reconciliation
October 31, 2021
Bank's Cash Balance, October 31	13,079	Company's Cash Balance, October 31	12,356
Per bank statement		Per general ledger
Add:		Add:
Deposit in transit	810	Correction of book error	270
Deduct:		Deduct:
Outstanding checks	-1,255	NSF Check charge	-80
Correction of bank error	-572	Bank service charges	-29
		Payment of note payable	-455
Bank balance per reconciliation	$12,062	Company balance per reconciliation	$12,062