On October 31, 2021, the bank statement for the checking account of Blockwood Video shows a balance of $12,742, while the company’s records show a balance of $12,336. Information that might be useful in preparing a bank reconciliation is as follows: Outstanding checks are $1,235. The October 31 cash receipts of $790 are not deposited in the bank until November 2. One check written in payment of utilities for $138 is correctly recorded by the bank but is recorded by Blockwood as a disbursement of $183. In accordance with prior authorization, the bank withdraws $551 directly from the checking account as payment on a note payable. The interest portion of that payment is $51 and the principal portion is $500. Blockwood has not recorded the direct withdrawal. Bank service fees of $25 are listed on the bank statement. A deposit of $568 is recorded by the bank on October 13, but it did not belong to Blockwood. The deposit should have been made to the checking account of Hollybuster Video, a separate company. The bank statement includes a charge of $76 for an NSF check. The check is returned with the bank statement, and the company will seek payment from the customer. Required: 1. Prepare a bank reconciliation for the Blockwood checking account on October 31, 2021. (Amounts to be deducted should be indicated with a minus sign.)

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter8: Sarbanes-oxley, Internal Control, And Cash

Section: Chapter Questions

Problem 18E

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Question

On October 31, 2021, the bank statement for the checking account of Blockwood Video shows a balance of $12,742, while the company’s records show a balance of $12,336. Information that might be useful in preparing a bank reconciliation is as follows:

Outstanding checks are $1,235.
The October 31 cash receipts of $790 are not deposited in the bank until November 2.
One check written in payment of utilities for $138 is correctly recorded by the bank but is recorded by Blockwood as a disbursement of $183.
In accordance with prior authorization, the bank withdraws $551 directly from the checking account as payment on a note payable. The interest portion of that payment is $51 and the principal portion is $500. Blockwood has not recorded the direct withdrawal.
Bank service fees of $25 are listed on the bank statement.
A deposit of $568 is recorded by the bank on October 13, but it did not belong to Blockwood. The deposit should have been made to the checking account of Hollybuster Video, a separate company.
The bank statement includes a charge of $76 for an NSF check. The check is returned with the bank statement, and the company will seek payment from the customer.

Required:

1. Prepare a bank reconciliation for the Blockwood checking account on October 31, 2021. (Amounts to be deducted should be indicated with a minus sign.)

	Blockwood Video
	Bank Reconciliation
	October 31, 2021
Bank’s Cash Balance		Company’s Cash Balance
Per bank statement		Per general ledger








Bank balance per reconciliation		Company balance per reconciliation