Question

Wright Company deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on May 31, Its Cash account shows a $27,900 debit balance. The company's May 31 bank statement shows $26,200 on deposit in the bank. a. The May 31 bank statement lists $120 in bank service charges; the company has not yet recorded the cost of these services b. Outstanding checks as of May 31 total $5,800. c. May 31 cash receipts of $6,400 were placed in the bank's night depository after banking hours and were not recorded on the May 31 bank statement. d. In reviewing the bank statement, a $420 check written by Smith Company was mistakenly drawn against Wright's account. e. The bank statement shows a $560 NSF check from a customer; the company has not yet recorded this NSF check. Prepare a bank reconciliation for the company using the above information.

Answer 1

Wright Company

Bank Reconciliation

May 31, 2013

Credit side Debit side

Bank statement $26200 | Book balance $27900

Add;

Deposit on May 31 $6400

Bank error $420

Sub-total=$33020

Deductions; | Deduct

ions

Outstanding checks $5800 | Bank service charge $120

Adjusted bank balance $27220 | NSF check $560

Total deduction $680

Adjusted book balance $27220