Question

As of June 30, Year 2, the bank statement showed an ending balance of $18,039. The unadjusted Cash account balance was $17,093. The following information is available:

Deposit in transit $2,905.
Credit memo in bank statement for interest earned in June $22.
Outstanding check $3,836
Debit memo for service charge $7

Required:
Determine the true cash balance by preparing a bank recondiliation as of June 30, 2016.

Answer 1

the true cash balance is $17,108

Step-by-step explanation:

First, update the Cash Book Bank Balance as follows :

Cash Book Bank (Balances Only)

Debit :

Balance as per Cash Book $17,093

Interest Earned $22

Totals $17,115

Credit :

Service charge $7

Balance as per updated Cash Book (Balance) $17,108

Totals $17,115

Next, Prepare a Bank Reconciliation Statement as follows :

Bank Reconciliation Statement

Balance as per Bank Statement $18,039

Add Lodgements not yet credited $2,905

Less Unpresented Cheques ($3,836)

Balance as per Cash Book $17,108