Branson Co. received its bankstatement for the month ending May 31, 2009, and re
ID: 2502231 • Letter: B
Question
Branson Co. received its bankstatement for the month endingMay 31, 2009, and reconciled the statement balance to the
May 31, 2009, balance in the Cash account. The reconciled
balance was determined to be $18,600. The reconciliation
recognized the following items:
1. A deposit made on May 31 for $10,200 was included in the Cashaccount balance but not in the bank statement balance.
2. Checks issued but not returned with the bank statement were No.673 for $2,940 and No. 687 for $5,100.
3. Bank service charges shown as a deduction on the bank statementwere $240.
4. Interest credited to Branson Co.'s account but not recorded onthe company's books amounted to $144.
5. Returned with the bank statement was a "debit memo" stating thata customer's check for $1,920 that had been deposited on May 23 hadbeen returned because the customer's account was overdrawn.
6.During a review of the checks that were returned with the bankstatement, it was noted that the amount of check No. 681 was $960but that in the company's records supporting the Cash accountbalance, the check had been erroneously recorded in the amount of$96.
Required:
(a) What was the balance in Branson Co.'s Cash account beforerecognizing any of these reconciling items? (Omit the "$" sign inyour response.)
Balance per Cash account before reconciliation
$
(b) What was the balance shown on the bank statement beforerecognizing any of these reconciling items? (Omit the "$" sign inyour response.)
Balance per bank before reconciliation
$
Explanation / Answer
A.
$
18600
240
1920
864
3024
144
21480
B.
$
18600
2940
5100
8040
10200
16440
A.
Balance in BransonCo's Cash Account before reconciling items$
Correct Balance18600
Add: Bank Charges240
NSF check returned1920
Error in recording check No.681864
3024
Less: interest collected by bank144
Balance as per CashAccount21480
B.
Balance shown on the BankAccount before reconciling items$
Correct Balance18600
Add: Outstanding checks No.6732940
No.6875100
8040
Less: Deposit in Transit10200
Balance as per bank(end of period)16440