Question

Maple Industries Inc. deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on December 31, its Cash account shows a debit balance of $18,719. The company’s bank statement as of December 31 shows an ending cash balance of $16,051. The following information was also available.

•	Outstanding checks as of December 31 total $2,326.
•	Included with the bank statement was a debit memo in the amount of $100 for service charges.
•	Check No. 2519, listed with the canceled checks, was correctly drawn for $870 in payment of a utility bill on December 16. The company mistakenly recorded it with a debit to Utilities Expense and a credit to Cash in the amount of $980.
•	The December 31 cash receipts of $3,620 were placed in the bank’s night depository after banking hours and were not recorded on the December 31 bank statement.
•	The bank deducted $1,384 for an NSF check from a customer deposited on December 10.

Required:

Prepare the bank reconciliation as of December 31.

Answer 1

  BANK RECONCILATION STATEMENT

PARTICULARS	AMOUNT($)
Balance as per books	18,719
Outstanding checks as of December 31 total $2,326 (Due to this cash balance as per books is reduced. At the same time there is no change is balance as per bank statement. So we will add $ 2326)	2326
Included with the bank statement was a debit memo in the amount of $100 for service charges.( Due to this Bank balance is reduced and there is no entry is books. So we will subtract $ 100)	(100)
Check No. 2519, listed with the canceled checks, was correctly drawn for $870 in payment of a utility bill on December 16. The company mistakenly recorded it with a debit to Utilities Expense and a credit to Cash in the amount of $980. (Entry is correct in books but amount recorded is higher by 980-870=110. So we will add 110 to cash balance as we have recorded expense higher by 110)	110
The December 31 cash receipts of $3,620 were placed in the bank’s night depository after banking hours and were not recorded on the December 31 bank statement. (Since this entry is only made is our book, so no balance will in bank. So we will subtract 3620)	(3620)
The bank deducted $1,384 for an NSF check from a customer deposited on December 10.(Since no entry is made in books so we will subtract 1384)	(1384)
Balance as per Bank Statement	16051