In: Accounting
The bank statement of Ricardo's Jewelry shows a balance of
$7,689.23. The bank charged a service fee of $15.00.
The account register shows deposits of $824.66 and $1,231.65 that
do not appear on the statement. Four checks recorded
in the register did not clear the bank by the end of the month.
These were written for $18.65; $95.00; $122.36; and $55.98.
The register is showing a balance of $9,468.55. What is the
reconciled balance of this account?
Solution: | ||||
The reconciled balance of this account =$9,453.55 | ||||
Working Notes: | ||||
Ricardo's Jewelry Shop | ||||
Bank Reconciliation | ||||
Cash Balance as per Bank statement | 7,689.23 | |||
Add: Deposit in transit | 824.66 | a | ||
Add: Deposit in transit | 1,231.65 | b | ||
Less: Outstanding Checks | -291.99 | c | ||
[$18.65 + $95 +$122.36 +$55.98 = 291.99 ] | ||||
True Cash Balance , period end | $9,453.55 | |||
Cash Balance as per Cash Account | $9,468.55 | |||
Less: service fee charged by bank | -15 | d | ||
True Cash Balance ,period end | $9,453.55 | |||
Notes: | ||||
a. | Deposit in transit is balance not reflected in bank statement but already recorded in register so it is added to bank balance | |||
b. | Deposit in transit is balance not reflected in bank statement but already recorded in register so it is added to bank balance | |||
c. | outstanding checks means check have been issued and recorded in register but not presented at bank for clearance , so it is deducted from bank balance to match the register balance | |||
d. | Service fee charged by bank is deducted from bank balance already but not from register so it is deducted from register balance. | |||
Please feel free to ask if anything about above solution in comment section of the question. |