Please help me prepare this Bank reconciliation?Bank Reconciliation and Entries The cash account for Bravo Bike Co. at May 1, 2012, indicated a balance of $14,000. During May, the total cash deposited was $70,610 and checks written totaled $65,560. The bank statement indicated a balance of $23,940 on May 31. Comparing the bank statement, the canceled checks,... |
Reconciliation rules to remember:
You adjust the company balance and make journal entries
1. If the bank has recorded something but the company hasn't.
Or
2. If the company has made a mistake.
You adjust the bank balance: no journal entries needed.
3. If the company has recorded something but the bank hasn't.
Or
4. If the bank has made a mistake.
a.Checks outstanding totaled $10,660.
Subtract from bank balance.
b.A deposit of $8,690, representing receipts of May 31, had been made too late to appear on the bank statement.
Add to bank balance.
c.The bank had collected for Bravo Bike Co. $4,590 on a note left for collection. The face of the note was $4,240.
Add to cash balance:
Dr Cash 4,590
Cr Notes Receivable 4,240
Cr Interest Revenue 370
d.A check for $360 returned with the statement had been incorrectly charged by the bank as $630.
Add 630 - 360 = 270 to bank balance
e.A check for $630 returned with the statement had been recorded by Bravo Bike Co. as $360. The check was for the payment of an obligation to Portage Co. on account.
Subtract 630 - 360 = 270 from cash balance
Dr Accounts Payable 270
Cr Cash 270
f.Bank service charges for July amounted to $70.
Subtract from cash balance
Dr Bank Charge 70
Cr Cash 70
g.A check for $1,060 from Elkhart Co. was returned by the bank because of insufficient funds.
Subtract from cash balance
Dr Accounts Receivable 1,060
Cr Cash 1,060
14,000 + 70,610 - 65,560 = $19,050 cash balance before adjustments
19,050 + 4,590 - 270 - 70 - 1,060 = $22,240 adjusted cash balance
23,940 - 10,660 + 8,690 + 270 = $22,240 adjusted bank balance
