Question

Using the following information: The bank statement balance is $3,271. The cash account balance is $3,509. Outstanding checks amount to $616. Deposits in transit are $714. The bank service charge is $131. A check for $79 for supplies was recorded as $70 in the ledger. Prepare a bank reconciliation for Miller Co. for August 31.

Answer 1

To prepare a bank reconciliation, start with the cash account balance and make adjustments for outstanding checks, deposits in transit, bank service charges, and any errors in recording checks. The adjusted cash account balance should match the bank statement balance.

Step-by-step explanation:

To prepare a bank reconciliation for Miller Co. for August 31, we will need to compare the cash account balance and the bank statement balance and make adjustments for any differences. Here's how we can do it:

1. Start with the cash account balance of $3,509.
2. Subtract the outstanding checks of $616 since these checks have not yet cleared the bank.
3. Add the deposits in transit of $714 since these deposits have not been recorded by the bank yet.
4. Subtract the bank service charge of $131.
5. Add the difference between the recorded check for supplies ($70) and the actual amount ($79), which is $9.

By following these steps, we can calculate the adjusted cash account balance. The adjusted cash account balance equals $3,481. This should match the bank statement balance of $3,271. If they do not match, it may indicate errors or discrepancies that need to be further investigated.