Question
On June 30, ANB Holdings Inc. showed a cash balance on their books of $10,788. The bank statement from the companys bank showed a month
On June 30, ANB Holdings Inc. showed a cash balance on their books of $10,788. The bank statement from the companys bank showed a month end balance of $14,146. On reviewing the bank statement, the following items were discovered:
1. | A deposit made on June 29 for $1,600 did not appear on the bank statement. | |
2. | Cheques written in the month of June but that did not appear on the bank statement were as follows: |
Cheque # 159 | $1,330 | |
Cheque # 160 | 27 | |
Cheque # 168 | 208 | |
Cheque # 170 | 300 | |
Cheque # 171 | 1,130 |
3. | The bank credited ANB Holdings Inc. account for $320 on June 19. This deposit did not belong to ANB,but belonged to another company and was posted in error. | |
4. | The bank statement showed receipt of a wire transfer of $2,160 in payment of a note receivable, as well as $120 interest. | |
5. | According to the bank statement, $27 was deducted from ANB account for service charges. | |
6. | The bank cleared cheque # 152 for $950; however, the cheque was recorded in ANBs records at $930. Research showed the bank was correct, and the cheque was recorded incorrectly in ANBs books. The cheque was written in payment of supplies expense. | |
7. | A cheque for $590 from one of ANBs customers was rejected by the bank due to insufficient funds (NSF). |
Prepare a bank reconciliation to the correct cash balance at June 30.
ANB Holdings Inc.
Bank Reconciliation
As at June 30
Prepare journal entries required to adjust the cash account at June 30.
14,146 1,600 15,746 Balance per bank statement, June 30 Add. Outstanding deposit Less. Outstanding cheques 2,995 Bank error 320 3,315 Correct cash balance 12,431 Balance per books, June 30 10,788 Collection of note receivable 2,160 Interest on note receivable 120 2,280 13,068 Less. Book error Bank service charges NSF cheque 20 27 590 637 Correct cash balance 12,431
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