Prepare a bank reconciliation for Grace, Inc., as of January 31 from the followi
ID: 2756401 • Letter: P
Question
Prepare a bank reconciliation for Grace, Inc., as of January 31 from the following information:
(a.) The January 31 cash balance in the general ledger is $2,544.
(b.) The January 31 balance shown on the bank statement is $2,272.
(c.) Checks issued but not returned with the bank statement were No. 435 for $226 and No. 448 for $91.
(d.) A deposit made on January 31 for $640 was included in the general ledger balance but not in the bank statement balance.
(e.) Interest credited to the account during January but not recorded on the company's books amounted to $36.
(f.) A bank charge of $12 for printing new checks was made to the account during January. Although the company was expecting a charge, the amount was not known until the bank statement arrived.
(g.) In the process of reviewing canceled checks, it was determined that a check issued to a supplier in payment of an account payable of $125 was recorded as a $152 cash disbursement.
Required:
(1.) Prepare the bank reconciliation for Grace, Inc., as of January 31.
(2.) Prepare the appropriate adjusting entry(ies) or show the reconciling items in a horizontal model, for Grace, Inc. related to the bank reconciliation.
Explanation / Answer
Grace, Inc. Bank Reconciliation Jan-31 Particulars Amounts (in $) Balance as per Bank, Jan 31 2272.00 Less: Checks issued but not returned No. 435 for $226.00 226.00 No. 448 for $91.00 91.00 Payment to supplier overstated 27.00 344.00 Add: Deposit in Transit 640.00 Adjusted Bank Balance 2568.00 Balance as per Books, Jan 31 2544.00 Add: Interest Credited 36.00 Less: Bank charge for printing cheques 12.00 Adjusted Book Balance 2568.00