EX 8-22 Bank reconciliation
Identify the errors in the following bank reconciliation:
Alma Co. Bank Reconciliation For the Month Ended November 30, 2012 Cash balance according to bank statement. . . . . . . . . . . . . . . . . . . . . . . . . . $12,090 Add outstanding checks: No. 915. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 850 960. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 615 964. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 850 965. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 775 3,090 $15,180 Deduct deposit of November 30, not recorded by bank . . . . . . . . . . . . . . 4,000 Adjusted balance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,180 Cash balance according to company’s records . . . . . . . . . . . . . . . . . . . . . . . $ 4,430 Add: Proceeds of note collected by bank: Principal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,000 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 $5,200 Service charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 5,230 $ 9,660 Deduct: Check returned because of insufficient funds. . . . . . . . . . . . . . . . $1,100 Error in recording November 23 deposit of $6,100 as $1,600. . 4,500 5,600 Adjusted balance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,060
Answer:
1. The heading should be “November 30, 2012,” and not “For the Month Ended November 30, 2012.”
2. The outstanding checks should be deducted from the balance per bank.
3. The deposit of November 30, not recorded by the bank, should be added to the balance per bank.
4. Service charges should be deducted from the balance per company’s records.
5. The error in recording the November 23 deposit of $6,100 as $1,600 should be added to the balance per company’s records.
A correct bank reconciliation would be as follows:
ALMA CO. Bank Reconciliation November 30, 2012 Cash balance according to bank statement ............ $12,090 Add deposit of November 30, not recorded by bank 4,000 $16,090 Deduct outstanding checks: No. 915............................................................... $ 850 960............................................................... 615 964............................................................... 850 965............................................................... 775 3,090 Adjusted balance........................................................ $13,000 Cash balance according to company’s records................................................................ $ 4,430 Add: Proceeds of note collected by bank: Principal...................................................... $5,000 Interest........................................................ 200 $5,200 Error in recording November 23 deposit as $1,600 instead of $6,100............................ 4,500 9,700 $14,130 Deduct: Check returned because of insufficient funds.............................. $1,100 Service charges.......................................... 30 1,130 Adjusted balance........................................................ $13,000
Alma Co. Bank Reconciliation For the Month Ended November 30, 2012 Cash balance according to bank statement. . . . . . . . . . . . . . . . . . . . . . . . . . $12,090 Add outstanding checks: No. 915. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 850 960. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 615 964. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 850 965. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 775 3,090 $15,180 Deduct deposit of November 30, not recorded by bank . . . . . . . . . . . . . . 4,000 Adjusted balance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,180 Cash balance according to company’s records . . . . . . . . . . . . . . . . . . . . . . . $ 4,430 Add: Proceeds of note collected by bank: Principal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,000 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 $5,200 Service charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 5,230 $ 9,660 Deduct: Check returned because of insufficient funds. . . . . . . . . . . . . . . . $1,100 Error in recording November 23 deposit of $6,100 as $1,600. . 4,500 5,600 Adjusted balance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,060
Answer:
1. The heading should be “November 30, 2012,” and not “For the Month Ended November 30, 2012.”
2. The outstanding checks should be deducted from the balance per bank.
3. The deposit of November 30, not recorded by the bank, should be added to the balance per bank.
4. Service charges should be deducted from the balance per company’s records.
5. The error in recording the November 23 deposit of $6,100 as $1,600 should be added to the balance per company’s records.
A correct bank reconciliation would be as follows:
ALMA CO. Bank Reconciliation November 30, 2012 Cash balance according to bank statement ............ $12,090 Add deposit of November 30, not recorded by bank 4,000 $16,090 Deduct outstanding checks: No. 915............................................................... $ 850 960............................................................... 615 964............................................................... 850 965............................................................... 775 3,090 Adjusted balance........................................................ $13,000 Cash balance according to company’s records................................................................ $ 4,430 Add: Proceeds of note collected by bank: Principal...................................................... $5,000 Interest........................................................ 200 $5,200 Error in recording November 23 deposit as $1,600 instead of $6,100............................ 4,500 9,700 $14,130 Deduct: Check returned because of insufficient funds.............................. $1,100 Service charges.......................................... 30 1,130 Adjusted balance........................................................ $13,000
