Question

The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31, 2017.

  

On July 31, the company’s Cash account has a $25,752 debit balance, but its July bank statement shows a $27,808 cash balance.

Check No. 3031 for $1,410 and Check No. 3040 for $697 were outstanding on the June 30 bank reconciliation. Check No. 3040 is listed with the July canceled checks, but Check No. 3031 is not. Also, Check No. 3065 for $481 and Check No. 3069 for $2,178, both written in July, are not among the canceled checks on the July 31 statement.

In comparing the canceled checks on the bank statement with the entries in the accounting records, it is found that Check No. 3056 for July rent expense was correctly written and drawn for $1,270 but was erroneously entered in the accounting records as $1,260.

The July bank statement shows the bank collected $7,000 cash on a noninterest-bearing note for Branch, deducted a $35 collection expense, and credited the remainder to its account. Branch had not recorded this event before receiving the statement.

The bank statement shows an $805 charge for a $795 NSF check plus a $10 NSF charge. The check had been received from a customer, Evan Shaw. Branch has not yet recorded this check as NSF.

The July statement shows a $11 bank service charge. It has not yet been recorded in miscellaneous expenses because no previous notification had been received.

Branch’s July 31 daily cash receipts of $8,152 were placed in the bank’s night depository on that date but do not appear on the July 31 bank statement.

Answer 1

Balance as per books	25,752
Add: Checks issued but not encashed	1,410
Add: Checks issued but not encashed	2,659
Less Amout under charged on check for rent	10
Add Direct Credit	6,965
Less bank Payments not recorded	805
Less Bank Charges	11
Less Payments not credited by bank	8,152
Balance as bank	27,808