With the information below, discuss each item whether it is a book reconciling or a bank reconciling item. After the discussion, prepare the bank reconciliation statement. Item 1: The bank statement for August 2014 shows an ending balance of $3,490. Item 2: On August 31, the bank statement shows charges of $35 for the service charge for maintaining the checking account. Item 3: On August 28, the bank statement shows a return item of $100 plus a related bank fee of $10. The return item is a customer's check that was returned because of insufficient funds. Item 4: The bank statement shows a charge of $80 for check printing on August 20. Item 5: The bank statement shows that $8 was added to the checking account on August 31 for interest earned by the company during the month of August. Item 6: The bank statement shows that a note receivable of $1,000 was collected by the bank on August 29 and was deposited into the company's account. On the same day, the bank withdrew $40 from the company's account as a fee for collecting the note receivable. Item 7: The company's cash account at the end of August shows a balance of $967. Item 8: During the month of August, the company wrote checks totalling more than $50.000. As of August 31, $3,021 of the checks written in August had not yet cleared the bank and $200 of checks written in June had not yet cleared the bank. Item 9: The $1,450 of cash received by the company on August 31 was recorded on the company's books as of August 31. However, the $1,450 of cash receipts was deposited at the bank on the morning of September 1. Item 10: On August 29 the company's Cash account shows cash sales of $145. The bank statement shows the amount deposited was actually $154.The company reviewed the transactions and found that $154 was the correct amount.
With the information below, discuss each item whether it is a book reconciling or a bank reconciling item. After the discussion, prepare the bank reconciliation statement. Item 1: The bank statement for August 2014 shows an ending balance of $3,490. Item 2: On August 31, the bank statement shows charges of $35 for the service charge for maintaining the checking account. Item 3: On August 28, the bank statement shows a return item of $100 plus a related bank fee of $10. The return item is a customer's check that was returned because of insufficient funds. Item 4: The bank statement shows a charge of $80 for check printing on August 20. Item 5: The bank statement shows that $8 was added to the checking account on August 31 for interest earned by the company during the month of August. Item 6: The bank statement shows that a note receivable of $1,000 was collected by the bank on August 29 and was deposited into the company's account. On the same day, the bank withdrew $40 from the company's account as a fee for collecting the note receivable. Item 7: The company's cash account at the end of August shows a balance of $967. Item 8: During the month of August, the company wrote checks totalling more than $50.000. As of August 31, $3,021 of the checks written in August had not yet cleared the bank and $200 of checks written in June had not yet cleared the bank. Item 9: The $1,450 of cash received by the company on August 31 was recorded on the company's books as of August 31. However, the $1,450 of cash receipts was deposited at the bank on the morning of September 1. Item 10: On August 29 the company's Cash account shows cash sales of $145. The bank statement shows the amount deposited was actually $154.The company reviewed the transactions and found that $154 was the correct amount.
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter6: Cash And Internal Control
Section: Chapter Questions
Problem 6.3E
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Transcribed Image Text:With the information below, discuss each item whether it is a book reconciling or a
bank reconciling item. After the discussion, prepare the bank reconciliation statement.
Item 1: The bank statement for August 2014 shows an ending balance of $3,490.
Item 2: On August 31, the bank statement shows charges of $35 for the service charge for
maintaining the checking account.
Item 3: On August 28, the bank statement shows a return item of $100 plus a related bank fee
of $10. The return item is a customer's check that was returned because of insufficient funds.
Item 4: The bank statement shows a charge of $80 for check printing on August 20.
Item 5: The bank statement shows that $8 was added to the checking account on August 31
for interest earned by the company during the month of August.
Item 6: The bank statement shows that a note receivable of $1,000 was collected by the bank
on August 29 and was deposited into the company's account. On the same day, the bank
withdrew $40 from the company's account as a fee for collecting the note receivable.
Item 7: The company's cash account at the end of August shows a balance of $967.
Item 8: During the month of August, the company wrote checks totalling more than $50.000.
As of August 31, S3,021 of the checks written in August had not yet cleared the bank and
$200 of checks written in June had not yet cleared the bank.
Item 9: The $1,450 of cash received by the company on August 31 was recorded on the
company's books as of August 31. However, the $1,450 of cash receipts was deposited at the
bank on the morning of September 1.
Item 10: On August 29 the company's Cash account shows cash sales of $145. The bank
statement shows the amount deposited was actually $154.The company reviewed the
transactions and found that $154 was the correct amount.
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