Question

Your assistant prepared the following bank reconciliation statement. It appears that the statement is unacceptable and the task of preparing a proper reconciliation falls upon you.

Brandon Company
Bank Reconciliation
May 31, 2017
Balance per books May 31			$9,585
Add:
Electronic Fund Transfer	$1,111
Deposit in transit	2,506		3,617
			$13,202
Deduct:
Bank charges	$27
NSF cheque, Rhonda Teal	534
Outstanding cheques	1,851
Error in cheque #78: correctly issued and processed       by the bank for $796, but incorrectly recorded       in the books as $743 (Accounts Payable–Delta Co.)	53		2,465
Indicated bank balance			$10,737
Balance per bank statement			9,427
Discrepancy			$1,310

Required:
1. Prepare a proper bank reconciliation showing the true Cash balance.

BRANDON COMPANY Bank Reconciliation May 31, 2017

Company's Books Bank Statement Balance per books Balance per bank Add Add Deduct Deduct

• 1

  Record to collection of EFT.

• 2

  Record to error, bank service charges, and NSF cheque.

2. Prepare the necessary journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

1					Bank Reconciliation
					May 31, 2017
	Cash Balance as per Bank Statement							9,427
	Add:	Deposit in Transit						2,506
								11,933
	Less:	Oustanding Cheque						1,851
	Adjusted Cash Balance as per Bank							10,082
	Cash Balance as per Books							9,585
	Add:	Electronic Funds Transfer						1,111
								10,696
	Less:	NSF Charges			534
		Error Check #78			53
		Bank Service Charges			27			614
	Adjusted Cash Balance as per Books							10,082
	Correct Balance for the cash account as on May 31, 2017 is $10,082
2	Journal Enteries :-
							Debit ($)	Credit ($)
i)	Cash A/c						1,111
	Accounts Receivable							1,111
	( Electronic Fund Transfer)
ii)	No Entry for Deposits in Transit as it is already recorded in the Books.
iii)	Bank Service Charges						27
	Cash A/c							27
	(Being Bank Charges recorded)
iv)	Rhonda Teal						534
	Cash A/c							534
	(NSF cheque)
v)	No Entry for Outstanding cheques as it is already recorded in the Books.
vi)	Delta Co.						53
	Cash A/c							53
	(Cheque Error #78 corrected)

Thanks.....