Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Bank Reconciliation The following information is available to assist you in preparing a bank reconciliation for Fernandez Corporation on May 31: The balance on the

Bank Reconciliation

The following information is available to assist you in preparing a bank reconciliation for Fernandez Corporation on May 31:

  1. The balance on the May 31 bank statement is $8,432.11.
  2. Not included on the bank statement is a $1,250 deposit made by Fernandez Corporation late on May 31.
  3. A comparison between the canceled checks returned with the bank statement and the company records indicated that the following checks are outstanding at May 31:
    No. 123 $23.40
    No. 127 145.00
    No. 128 210.80
    No. 130 79.24
  4. The Cash account on the company's books shows a balance of $9,965.34.
  5. The bank acts as a collection agency for interest earned on some municipal bonds held by Fernandez Corporation. The May bank statement indicates interest of $465.00 earned during the month.
  6. Interest earned on the checking account and added to Fernandez Corporation' account during May was $54.60. Miscellaneous bank service charges amounted to $50.00.
  7. A customer's NSF check in the amount of $177.92 was returned with the May bank statement.
  8. A comparison between the deposits listed on the bank statement and the company's books revealed that a customer's check in the amount of $123.45 was recorded on the books during May but was never added to the company's account. The bank erroneously added the check to the account of Hernandez Corporation, which has an account at the same bank.
  9. The comparison of deposits per the bank statement with those per the books revealed that another customer's check in the amount of $101.10 was correctly added to the company's account. In recording the check on the company's books, however, the accountant erroneously increased the Cash account by $1,011.00.

Required:

Enter all amounts rounded to the nearest cent.

1. Prepare a bank reconciliation in good form.

Fernandez Corporation
Bank Reconciliation
May 31
Balance per bank statement, May 31 $
Add: Deposit in transit $
Add: Bank error: deposit credited to wrong account
Deduct: Outstanding checks:
No. 123 $
No. 127
No. 128
No. 130
Adjusted balance, May 31 $
Balance per books, May 31 $
Add: Interest earned on bonds $
Add: Interest earned on account
Deduct: Bank service charges $
Deduct: NSF check
Deduct: Book error $
Adjusted balance, May 31 $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Quality Management Systems Keeping Your Quality Management System Relevant

Authors: Herne European Consultancy, Ray Tricker

1st Edition

0992758521, 978-0992758523

More Books

Students also viewed these Accounting questions