Question

Using the following information, prepare a bank reconciliation for Cullumber Company for May 31, 2022. a. The bank statement balance is $9,100. b. The cash account balance is $6,830. c. Outstanding checks totaled $2,460. d. Deposits in transit are $600. e. The bank service charge is $10. f. Collection of note by the bank, $420.

Answer 1

Bank reconciliation for Cullumber Company for May 31, 2022

Amount in $ Amount in $

Balance per bank statement 9,100

Less:

Outstanding checks 2,460

collection of note by bank 420

Subtotal (2,880)

Add:

Deposit in transit 600

Bank service charge 10

Subtotal 610

Balance per cash book 6,830

Step-by-step explanation:

The bank reconciliation is one done between the balance per the books and balance per the bank statement.

This is usually as a result of transactions known as reconciling items. These are items that have either been recognized in books but yet to be recorded by the bank or vice versa, transactions recorded wrongly by one of the parties etc.

Answer 2

Bank Reconciliation Statement:

Balance as per bank Statement $9,100

Balance as per Cash Book: $6,830

Less: Bank Charges: $(10)

Add: Note Collection in bank: $420

Adjusted cash book balance $7,240

Add: Outstanding Checks $2,460

Less: Uncleared Deposits $600

Balance as per cash book: $9,100

Step-by-step explanation:

Starting point to prepare bank statement is to calculate adjusted cash bank balance by making transactions recorded in bank but not in cash book i.e bank charges and direct deposits.

After that timing differences are adjusted for checks sent for payment but not presented yet in bank to be paid often know as un presented checks and uncleared deposits.