Question

On December 31, 2013, the president of HEB Inc. reviewed the balance of the company’s bank account at the nearby TD-Bank. The balance in the account was $9,225. However the company’s cash account according to its books and ledgers had a balance of $3,640.

The CEO of the company hires a CPA to reconcile the two accounts.

the following information was provided to the CPA. Please help complete the Bank reconciliation.

HEB Inc.’s treasurer dropped off $8,400 at the bank on 12/31/2013. This deposit will be recorded the following day.

Check #21063 for $11,550 was mailed by HEB Inc. and written to Nestle Co. It has not yet cleared the bank.

Check #22083 for $265 was received by HEB Inc. and deposited in the bank. Unfortunately it was a bad check.

TD-bank charged HEB Inc. A handling fee for NSGF(non-sufficient funds) of $30.

HEB Inc.’s payroll service withdrew payroll expenses for the period ended 12/29/13. The amount withdrawn was $13,750 and HEB Inc. appropriately made the adjustment on its books.

HEB Inc.’ has credit card sales totaling $62,000. TD-bank charges HEB Inc. a 2% fee for these sales, which took place in December. HEB Inc. did not make the adjustment for this on its books in December.

Because HEB Inc. is such a wonderful customer of TD-bank; it received a preferred customer rebate at the end of the month of $20.

On 12/31/2013 HEB Inc. prepares and record the rent expense for 1/2014. This amount is $3,500. The president plans on handing it to the landlord in person on the 5^th of January. This check will not clear the bank until at least one week into 2014.

The treasurer of HEB Inc. writes checks by hand. Sadly, the treasurer has a terrible handwriting. A check written for $1,500 was correctly recorded on HEB Inc.’s books but was cashed for $1,050.

	Adjustments	Amounts ($)
Balance Per TD-bank
Actual Cash Balance 12/31/2013
Balance per HEB Inc.’s Books
Actual Cash Balance 12/31/2013

Answer 1

Bank Reconciliation is as prepared below:

HEB Inc
Bank Reconciliation
Dec 31, 2013
Particulars	Adjustments	Amount ($)
Balance as per bank		9,225
Add: Deposit in transit	8,400
Less: outstanding checks:
21063	11,550
Adjusted cash balance per bank		6,075
Cash balance as per books		3,640
Add: check written by 1,500 instead of 1,050	450
Add: Rent expense check	3,500
Add: Customer Rebate	20
Less:
bank Charges on sales (2% of 62,000)	1,240
NSF chcek returned (22083)	265
Handling fees	30
Adjusted cash balance as per books		6,075