Question

Rick Hall owns a card shop, Hall’s Cards. The following cash information is available for the month of August 2018: As of August 31, the bank statement shows a balance of $12,160. The August 31 unadjusted balance in the Cash account of Hall’s Cards is $8,275. A review of the bank statement revealed the following information: 1. A deposit of $1,350 on August 31, 2018, does not appear on the August bank statement. 2. It was discovered that a check to pay for baseball cards was correctly written and paid by the bank for $2,240 but was recorded on the books as $3,140. 3. When checks written during the month were compared with those paid by the bank, three checks amounting to $4,385 were found to be outstanding. 4. A debit memo for $50 was included in the bank statement for the purchase of a new supply of checks.

Answer 1

Reconciliation of Bank Statement and Cash balance as per books of Account.

Particulars	Amount
Bank Balance as on August 31st	$12160
Add: Check Deposited not cleared till 31st August	$1350
Less : Checks Written not cleared as on 31st August	($4385)
Corrected Cash Balance as on 31st August	$9125
Unadjusted Cash Balance as on 31st August	$8275
Less : Debit Memo for Purchasing checks	($50)
Add : Check issued of $2240 wrongly recorded as $3140 in books ($3140 - $2240)	$900
Corrected Cash Balance as on august 31st	$9125

answered by: anonymous