Question

The following information is available for Airborne, Inc. as of March 31, 2020:

a. Cash on the books as of March 31 amounted to $22,754.16. Cash on the bank statement for the same date was $32,351.46.



b. A deposit of $3,344.50, representing cash receipts of March 31, did not appear on the bank statement.



c. Outstanding checks totaled $3,936.80.



d. A check for $1,920.00 returned with the statement was recorded incorrectly in the check register as $1,380.00. The check was for a cash purchase of merchandise.



e. The bank collected $10,300.00 for Airborne, on a note. The face value of the note was $10,000.00.



f. The bank mistakenly charged to the company account a check for $755.00 drawn by another company.



REQUIRED:

Prepare in a proper format the Bank Reconciliation for Airborne, Inc. as of March 31, 2020.

Answer 1

To prepare the Bank Reconciliation for Airborne, Inc. as of March 31, 2020, compare the cash balance on the books with the cash balance on the bank statement and account for any differences.

Step-by-step explanation:

To prepare the Bank Reconciliation for Airborne, Inc. as of March 31, 2020, we need to compare the cash balance on the books with the cash balance on the bank statement.

1. The cash balance on the books is $22,754.16 and the cash balance on the bank statement is $32,351.46. The difference of $9,597.30 is the reconciling item.
2. We need to account for the deposit of $3,344.50 that is recorded on the books but not on the bank statement. This increases the reconciling item to $12,941.80.
3. The outstanding checks of $3,936.80 need to be deducted from the reconciling item, bringing it down to $9,005.00.
4. The incorrectly recorded check of $1,920.00 needs to be added back to the reconciling item, making it $10,925.00.
5. The bank collected $10,300.00 for Airborne on a note, which needs to be added to the reconciling item, resulting in a total reconciling item of $21,225.00.
6. Finally, we need to deduct the erroneously charged check of $755.00 to another company from the reconciling item, giving a final reconciling item of $20,470.00.

The Bank Reconciliation for Airborne, Inc. as of March 31, 2020 would show a reconciling item of $20,470.00, which needs to be further analyzed and resolved.