Question

The following data were accumulated for use in reconciling the bank account of Kaycee Sisters Inc. for August 20Y9:

a. Cash balance according to the company's records at August 31, $27,060.
b. Cash balance according to the bank statement at August 31, $28,460.
c. Checks outstanding, $5,490.
d. Deposit in transit, not recorded by bank, $4,410.
e. A check for $480 in payment of an account was erroneously recorded by Kaycee Sisters Inc. as $840.
f. Bank debit memo for service charges, $40

Required:
Record the effects on the accounts and financial statements of the company based upon the information above.

Answer 1

Cash account reconciliation

Balance: $27,060

- Bank charges: ($40)

+ Error in recording check: $360

Reconciled cash account: $27,380

Bank account reconciliation:

Balance: $28,460

+ Deposit in transit: $4,410

- Checks outstasnding: ($5,490)

Reconciled bank account: $27,380