equired: 1. Record any required adjustments from the bank reconciliation in the Cash at bank account. Total and balance the account. 2. Prepare the bank reconciliation statement for Bach Ltd at 31 August 2021. 3. In preparing a bank reconciliation, explain how you would do the reconciliation if the bank statement showed a debit balance.
The 31 August 2021 bank statement of Bach Ltd has just arrived from United Bank. To prepare Bach’s bank reconciliation, you gather the following data:
a) Bach’s Cash account has a balance of $2,900 on 31 August.
b) The bank statement includes two dishonoured cheques from customers: B. Smith, $400 and A. Green, $110.
c) The following cheques appear in the cash payments journal of Bach but have not yet been cleared by the bank at 31 August:
Cheque no. Amount
237 $190
288 170
291 520
294 630
d) Bach collects from a few customers by EFT. The August bank statement lists a $1,300 EFT deposit for a collection on account.
e) The bank statement includes two special deposits that Bach hasn’t recorded yet: $970 for dividend revenue, and $80 interest revenue which Bach earned on its bank balance during August.
f) The bank statement lists a $30 bank service charge and a $15 excess transaction fee.
g) On 31 August, Bach deposited $350 from a customer, this deposit hasn’t yet appeared on the bank statement.
h) The bank statement includes a $1,000 deduction for a cheque drawn by Interstate Freight Company, a business unrelated to Bach. Bach notified the bank of this error.
i) The 31 August balance on the bank statement is $4,855 Cr.
Required:
1. Record any required adjustments from the bank reconciliation in the Cash at bank account. Total and balance the account.
2. Prepare the
3. In preparing a bank reconciliation, explain how you would do the reconciliation if the bank statement showed a debit balance.
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