The bank statement of Ricardo's Jewelry shows a balance of $7,689.23. The bank charged a service...

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?

Solutions

Expert Solution

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.

ekkarill92 answered 1 year ago

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