I posted this last night and still need some help. I need to prepare a bank reco
ID: 2387948 • Letter: I
Question
I posted this last night and still need some help.
I need to prepare a bank reconciliation based on the following information.
a) The balance on the May 31, 2010 bank statement is $8,432.11.
b) Not included on the bank statement is a $1,250 deposit made by Calico Corners late on May 31.
c) A comparison between the canceled checks returned with the bank statement and the company records indicated that the following checks are outstanding at May 32
No. 123 $23.40
No. 127 145.00
No. 128 210.80
No. 130 67.32
d) The Cash account on the company's books shows a balance of $9,965.34.
e) The bank acts as a collection agency for interest earned on some municipal bonds held by Calico Corners. The May bank statement indicates interest of $465.00 earned during the month.
f) Interest earned on the checking account and added to Calico Corners' account during May was $54.60. Miscellaneous bank service charges amounted to $50.00.
g) A customer's NSF check in the amount of $166.00 was returned with the May bank statement.
h) A comparison between the deposits listed on the bank statement and the company's books revealed that a customer's check in the amount of $123.45 was recorded on the books during May but was never added to the company's account. The bank erroneously added the check to the account of Calico Closet, which has an account at the same bank.
i) The comparison of deposits per the bank statement with those per the books revealed that another customer's check in the amount of $101.10 was correctly added to the company's account. In recording the check on the company's books, however, the accountant erroneously increased the Cash account by $1,011.00
This is what I've got so far:
I need to know if what I have so far is correct and what else I need to do in order to get the correct adjusted balance at the end.
Explanation / Answer
There are 2 issues remaining - one is a bank error (h) and the other one is a book error (i).
1. In (h), the bank misplaced a deposit. So you need to add $123.45 on the bank side (not on the book side like you surrently have).
2. In (i), the book error requires you to subtract $909.9 (1011-101.1) from the book side because you overstated the deposit.
If you do all that, you should get $9,359.04 as the adjusted balance.