Question

PROBLEM 2 The bank statement for Lair Company shows a balance per bank of $15,907.45 on April 30, 2002. On this date the balance of cash per books is $11,589.45. From the foregoing steps, the following reconciling items are determined.

1.   Deposits in transit: April 30 deposit (received by bank on May 1).    $2,201.40

2. Outstanding checks: No. 453, $3,000.00; no. 457, $1401.30; no. 460, $1,502.70.                                          $5,904.00

3. Errors: Check no. 443 was correctly written by Laird for $1,226.00 and was correctly paid by the bank. However, it was recorded for $1,262.00 by Laird Company.       $36.00

4. Bank memoranda:

1. Debit—NSF check from J.R. Baron for $425.60 $425.60
2. Debit—Printing Company checks charge $30.00 $ 30.00
3. Credit—Collection of note receivable for $1,000 plus interest $1,035.00

     Earned $50, less bank collection for of $15.                       

REQUIRED: PREPARE A BANK RECONCILIATION FOR LAIR COMPANY (16 pts.)

Answer 1

Solution:

Bank reco
Bank's Cash balance	Company's cash balance
Particulars	Amount	Particulars	Amount
Ending balance as per Bank Statements	$15,907.45	Ending Balance as per cash books	$11,589.45
Additions:		Additions:
Deposits in transit	$2,201.40	Note collection by bank (net of collection fee)	$1,035.00
		Incorrect recording of check no 443	$36.00
Deductions:		Deductions:
Outstanding Checks (Check no 3031, 3065, 3069) ($1,400 + $476 + $2,168)	$5,904.00	NSF Check	$425.60
		Service Charge	$30.00
Up to date cash balance as per bank	$12,204.85	Up to date cash balance as per books	$12,204.85