Question
QUESTION 31 Clark Corp. prepares monthly bank reconciliations of its checking account balance. The bank statement for May, 2020, indicated the following: The bank statement
QUESTION 31
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Clark Corp. prepares monthly bank reconciliations of its checking account balance. The bank statement for May, 2020, indicated the following:
The bank statement for May, 2020, indicated the following:
Amounts
Balance, May 31, 2020
$65,000
Service charge for May
60
Interest earned during May
100
NSF check from Nark Corp. (deposited by Clark)
2,000
Note ($4,000) and interest ($180) collected for Clark from a customer of Clark's
4,180
An analysis of canceled checks and deposits and the records of Clark revealed the following items:
Amounts
Checking account balance per Clark's books
$58,570
Outstanding checks as of May 31
6,630
Deposit in transit at May 31
2,780
Error in recording check #205 issued by Clark
360
The correct amount of check #205 is $590, but it was recorded as a cash disbursement of $950. The check appeared on the bank statement correctly.
The bank reconciliation structure is shown below: Balance per bank statement, May 31 $ Add: Deduct: ____________ Adjusted balance, May 31 $
========== Balance per books, May 31 $ Add:
Deduct: ____________ Adjusted balance, May 31 $ ==========
Indicate where the $4,180 interest and note collected for Clark during May will appear in the above structure.
a. Add to balance per bank statement
b. Add to balance per books
c. Deduct from balance per bank statement
d. Deduct from balance per books
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