Question

The Cash account of Snug as a Bug Security Systems reported a balance of $ 2 comma 570 at December 31​, 2018. There were outstanding checks totaling $ 1 comma 000 and a December 31 deposit in transit of $ 100. The bank​ statement, which came from Tri Cities​ Bank, listed the December 31 balance of $ 4 comma 120. Included in the bank balance was a collection of $ 660 on account from Wayne Brown​, a Snug as a Bug customer who pays the bank directly. The bank statement also shows a $ 30 service charge and $ 20 of interest revenue that Snug as a Bug earned on its bank balance.

Required:
Prepare Snug as a Bug​'s bank reconciliation at December 31.

Answer 1

Bank Reconciliation Statement as at December 31​, 2018

Balance as per updated Cash Book $3,220

Add Unpresented Cheques $1,000

Less Lodgements not yet credited ($100)

Balance as per Bank Statement $4,120

Step-by-step explanation:

The first step in preparing a bank reconciliation statement is to update the Cash Book Bank balance.

Debit :

Wayne Brown $660

Interest revenue $20

Balance as at December 31, 2018 $2,570

Totals $3,250

Credit :

Service charge $30

Updated Cash Book balance $3,220

Totals $3,250

Then use the updated Cash book Bank Balance to prepare the Bank Reconciliation Statement.

Bank Reconciliation Statement as at December 31​, 2018

Balance as per updated Cash Book $3,220

Add Unpresented Cheques $1,000

Less Lodgements not yet credited ($100)

Balance as per Bank Statement $4,120