Conducting A Bank Reconciliation

Bank Reconciliation

The following information is available to reconcile a company’s book balance of cash with its bank statement’s cash balance as of June 30. The June 30 cash balance according to the accounting records is $8,542, and the bank statement cash balance for that date is $8,047.

a) The bank erroneously cleared a $95 check against the account in June that was not issued by the company. The check documentation included with the bank statement indicated that another company issued the check.

b) On June 30, the bank issued a credit memorandum for $5 interest earned on the company’s account.

c) When the June checks were compared with entries in the accounting records, it was found that Check No. 1727 had been correctly drawn for $540 to pay for advertising. However, it was erroneously entered in the accounting records as $450.

d) A credit memorandum indicated that the bank collected $900 cash on a note receivable for the company, deducted a $30 collection fee, and credited the balance to the company’s Cash account. The company did not record this transaction before receiving the statement.

e) A debit memorandum of $895 was enclosed with the bank statement for an NSF check for $870 received from a customer. The bank assessed a $25 fee for processing it.

f) June 30 daily cash receipts of $1,315 were placed in the bank’s night depository on that date, but did not appear on the June 30 bank statement.

g) June 30 cash disbursements journal indicated that Check No. 1737 for $830 and Check No. 1740 for $280 were both written and entered in the accounting records, but were not among the canceled checks.

h) A debit memorandum for $85 indicated the bank deducted the annual lock box fee for the company.


a) Prepare the bank reconciliation for this company as of June 30.

b) Prepare the related journal entries

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