On December 31, 2020, TEJ Company had a cash balance per books of $8,664. The statement from DUABI Islamic Bank on that date showed a balance of $15,900. A comparison of the bank statement with the Cash account revealed the following facts. NSF check of customer returned by bank $4,200.Check No. 210 was correctly written and paid by the bank for $593. The cash payment journal reflects an entry for Check No. 210 as a debit to Accounts Payable and a credit to Cash in Bank for $539.Bank service charge for December was $100.A payment on account was incorrectly entered in the cash payments journal and posted to the accounts payable subsidiary ledger for $824 when Check No. 318 was correctly prepared for $284. The check cleared by the bank in December.The bank collected a note receivable for the company for $3,000 plus $100 interest revenue.Checks written in December but still outstanding $8,000.Checks written in November but still outstanding $5,150.Deposits of December 29 and 30 not yet recorded by bank $5,200. Required:Prepare a bank reconciliation statement at September 30 for TEJ Company.Explain the need and importance of the bank reconciliation

Bank reconciliation statement is prepared where an entry which is found in one book (Cash book or…

Answered: On December 31, 2020, TEJ Company had a…

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter6: Bank Accounts, Cash Funds, And Internal Controls

Section: Chapter Questions

Problem 1PB

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On December 31, 2020, TEJ Company had a cash balance per books of $8,664. The statement from DUABI Islamic Bank on that date showed a balance of $15,900. A comparison of the bank statement with the Cash account revealed the following facts.

NSF check of customer returned by bank $4,200.
Check No. 210 was correctly written and paid by the bank for $593. The cash payment journal reflects an entry for Check No. 210 as a debit to Accounts Payable and a credit to Cash in Bank for $539.
Bank service charge for December was $100.
A payment on account was incorrectly entered in the cash payments journal and posted to the accounts payable subsidiary ledger for $824 when Check No. 318 was correctly prepared for $284. The check cleared by the bank in December.
The bank collected a note receivable for the company for $3,000 plus $100 interest revenue.
Checks written in December but still outstanding $8,000.
Checks written in November but still outstanding $5,150.
Deposits of December 29 and 30 not yet recorded by bank $5,200.

Required:

Prepare a bank reconciliation statement at September 30 for TEJ Company.
Explain the need and importance of the bank reconciliation

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