Question

Bridgeport Corp. has just received its August 31, 2020 bank statement, which is summarized as follows:

Provincial Bank of Manitoba		Disbursements		Receipts		Balance
Balance, August 1						$9,510
Deposits during August				$34,300		43,810
Note collected for depositor, including $80 interest				1,250		45,060
Cheques cleared during August		$34,400				10,660
Bank service charges		15				10,645
Balance, August 31						10,645

The general ledger Cash account contained the following entries for the month of August:

Cash
Balance, August 1	10,760	Disbursements in August	35,142
Receipts during August	36,700

Deposits in transit at August 31 are $4,500, and cheques outstanding at August 31 total $1,900. Cash currently on hand at August 31 is $290 and there were postdated cheques from customers (for September 1) in the amount of $620. The bookkeeper improperly entered one cheque in the books at $150.50. The cheque was actually written for $168.50 for supplies (expense) and cleared the bank during the month of August.

Prepare a bank reconciliation dated August 31, 2020, proceeding to a correct balance. (List items that increase balance as per bank & books first.) Bridgeport Corp. Bank Reconciliation, August 31, 2020 Provincial Bank of Manitoba Balance per bank statement, Aug. 31, 2020 $ Add : Cash on hand $ Deposits in transit Less Outstanding cheques Correct cash balance $ $ Add Note and interest Collected Less Bank service charges $ Understated cheque for supplies Correct cash balance $

Answer 1

Bank Reconciliation Statement
Balance as per bank statement		10645
Add:
Deposits in transit		4500
Cash in hand		290	4790
Sub total				15435
Less:
Outstanding checks			1900
Adjusted balance as per bank		13535
Balance as per books		12318
Add:
Note collected with interest		1250
Sub total				13568
Less:
Check wrongly recorded	18
Service charges		15	33
Adjusted balance as per books		13535
Adjusting entries
S.no.	Accounts title and explanations		Debit $	Credit $
a.	Cash account			1,250
	Notes receivable				1170
	Interest revenue				80
	(for notes collected)
b.	Misc. expenses			15
	Cash account				15
	(for service charges)
c.	Supplies account			18
	Cash account				18
	(for recording supplies)
Cash balance:   $ 13535