Question

Wright Company 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 May 31, 2017, its Cash account shows a $29,700 debit balance. The company’s May 31 bank statement shows $28,000 on deposit in the bank.

1.The May 31 bank statement lists $210 in bank service charges; the company has not yet recorded the cost of these services.

2.Outstanding checks as of May 31 total $6,700.

3.May 31 cash receipts of $7,300 were placed in the bank’s night depository after banking hours and were not recorded on the May 31 bank statement.

4.In reviewing the bank statement, a $510 check written by Smith Company was mistakenly drawn against Wright’s account.

5. The bank statement shows a $380 NSF check from a customer; the company has not yet recorded this NSF check. Prepare a bank reconciliation for the company using the above information.

Answer 1

Cash Balance as per Bank	$28,000	Cash Balance as per Cash Book	$29,700
Add:Deposit on May 31	$7,300	Less:Bank service charges	-$210
Add:Bank error	$510	Less:NSF Check	-$380
Less:Outstanding checks	-$6,700
Adjusted Bank balance	$29,110	Adjusted Book balance	$29,110