Question

Alpha company does all of its banking with the Micro City Bank & Trust, Co. The following banking information from its bank statement dated January 31, 2018 was provided to you from late on the close of business today. Your general manager ask you to prepare the bank reconciliation because it is believe that there may be some personnel concerns. One of great concern is that IT section noted that the general ledger balances were not being calculated. The day-to-day system information was entered by for some reason no monthly balances could be system generated. It now remains to you to determine what should be the balance per books for the Cash account. This is critical information since it will be used to validate any system generated dollar amount for the Cash account as of 1/31/18 once the IT section can get its act together and "fix" the system!!

Item:                                                                         Amount:

-Cash Balance per Bank                                            $30,200

(1/31/18)

-Bank Service Charge                                                175

-Collection of Note Receivable from Mr.                   5,145

Yankee Zulu including the interest

of $150

-Micro Citi B&T paid directly from the cheque         2,650

account the current portion of Alpha's mortgage

payable which included the interest due

for the month in the amount of $150

Customer (Mr. Welcher) cheque was returned as NSF by Micro Bank system for $250. The following additional information was determined from a review of the cash payments & receipts and the cheque register for Alpha company:

1.    The following cheques had not cleared the bank as paid:

11/20/17        #5005             Bravo Office Supply Store      $375

1/15/18          #5025             Zulu Electric Company           2,900

1/30/18          #5030             Bravo Office Supply Store      300

2.The following information was recorded in Alpha's cash receipts ledger and have not yet been recorded in the bank statements:

1/15/18          Store Cash Sales                    $275

1/15/18          Cheques from Store Sales     2,800

1/31/18          Store Cash Sales                    250

1/31/18          Cheques from Store Sales     5,500

Alpha company's lead cashier has not returned to work since January 16^th. After considerable inquiry it was discovered that the lead casher was arrested illegal drug possession. It is crucial that you preform this monthly bank reconciliation and make notes of any unusual items for discussion with the general manager in the morning. In this process, you have not noted any errors made by the bank. Any recording errors are considered to be made by Alpha Company personnel, Therefor, to get started you must prepare, in good form, the January 31, 2018 Bank Reconciliation for Alpha Company based on the information you have at hand.

Answer 1

Solution:

Alpha Company
Bank Reconciliation - January 31
Bank's Cash balance		Company's cash balance
Particulars	Amount	Particulars	Amount
Ending balance as per Bank Statements	$30,200.00	Ending Balance as per cash books (Bal fig)	$33,380.00
Additions:		Additions:
Deposit in Transit ($275 + $2,800 + $250 + $5,500)	$8,825.00	Note collection by bank	$5,145.00
Deductions:		Deductions:
Outstanding Checks ($375 + $2,900 + $300)	$3,575.00	Bank Service Charge	$175.00
		Mortgage payment (Including interest)	$2,650.00
		NSF Check	$250.00
Up to date cash balance as per bank	$35,450.00	Up to date cash balance as per books	$35,450.00