Question

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Pelzer Company reconciled its bank and book statement balances of Cash on August 31 and showed two cheques outstanding at that time, #5888 for $6,080 and #5893 for $1,453.00. The following information was available for the September 30, 2017, reconciliation:

From the September 30, 2017, bank statement

BALANCE OF PREVIOUS STATEMENT ON AUG. 31/17	10,440.00
6 DEPOSITS AND OTHER CREDITS TOTALLING	19,446.00
9 CHEQUES AND OTHER DEBITS TOTALLING	24,130.00
CURRENT BALANCE AS OF SEPT. 30/17	5,756.00

Chequing Account Transactions
Date	Amount	Transaction Description	Date	Amount	Transaction Description
Sept. 05	5,420.00	+ Deposit	Sept. 25	3,316.00	+ Deposit
12	2,315.00	+ Deposit	30	39.00	+ Interest
17	200.45	− NSF cheque	30	3,488.00	+ Credit memo
21	5,192.00	+ Deposit

Date	Cheque No.	Amount	Date	Cheque No.	Amount
Sept. 03	5904	9,340.55	Sept. 22	5888	6,080.00
07	5901	1,446.00	24	5909	1,864.00
08	5905	295.00	28	5907	2,896.00
10	5903	1,150.00	29	5902	858.00

From Pelzer Company’s accounting records:

Cash					Acct. No. 101
Date	Explanation	PR	Debit	Credit	Balance
2017
Aug. 31	Balance				2,583.00
Sept. 30		CR12	17,406.00		19,989.00
30		CD23		13,819.55	6,169.45

Deposits Made
Sept. 5	$5,420.00
12	2,315.00
21	5,192.00
25	3,316.00
30	1,163.00
Total Sept. Cash Receipts	$17,406.00

Cheques Written
No. 5901	$ 1,446.00
5902	858.00
5903	1,150.00
5904	3,940.55
5905	295.00
5906	624.00
5907	2,896.00
5908	746.00
5909	1,864.00
Total Sept. Cash Disbursements	$13,819.55

•    Cheque #5904 was correctly written for $9,340.55 to pay for computer equipment; however, the bookkeeper misread the amount and entered it in the accounting records with a debit to Computer Equipment and a credit to Cash as though it were for $3,940.55. The NSF cheque was originally received from a customer, Lisa Willis, in payment of her account. Its return was not recorded when the bank first notified the company.

•    The credit memo resulted from an electronic fund transfer of $3,538 for a customer payment. The bank had deducted a $50.00 bank service charge. The collection has not been recorded.

Required:
1. Prepare a September 30 bank reconciliation for the company

Answer 1

Pelzer Company’s
Bank Reconciliation
Sep-30
Bank Statement Balance		5,756.00	Book Balance		6,169.45
Add:			Add:
Deposit in Transit of Sep 30	1,163.00		Note Collected	3,488.00
			Interest Received	39.00
Deduct:			Deduct:
Outstanding Checks(#5906)	624.00		Error in recording check #5904	5,400.00
Outstanding Checks(#5908)	746.00		NSF Check	200.45
Outstanding Checks(#5893)	1,453.00
Adjusted Bank Balance		4,096.00	Adjusted Book Balance		4,096.00