Purchase Solution

Bank Reconciliation

Not what you're looking for?

Ask Custom Question

ABC received its bank statement for the month ending March 31, 2002, and reconciled the statement balance to the March 31, 2002, balance in the cash account. The reconciled balance was determined to be $5,600.

The reconciliation recognized the following items:
1. ABC had deposits in transit in the amount of $1,700. These deposits had not been processed by the bank yet.
2. There were outstanding checks totaling $2,000. These are checks written by ABC but not collected yet by the holders of these checks.
3. The bank charged a service charge of $50. ABC was previously unaware of this charge.
4. An NSF check from a customer for $500 was included with the bank statement. ABC had not been previously notified that the check had been returned NSF.
5. Included in the canceled checks was a check actually written for $780. However, it had been recorded as a disbursement of $870.

Questions:
a. What was the balance in ABC's cash account before recognizing any of the above reconciling items?
b. What was the balance shown on the bank statement before recognizing any of the above reconciling items?

Purchase this Solution
Solution Summary

This solution looks at reconciling a bank statement.

Solution Preview

Here is how the adjustments are made:

1. The deposits in transit are added to the bank statement since these are funds that still need to be received by the bank and is money that the company has received from other companies.
2. Outstanding checks are subtracted from the bank statement since these funds still need to be ...

Purchase this Solution
Free BrainMass Quizzes
Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

View More Free Quizzes
Related BrainMass Solutions

  • Discuss the purpose of a bank reconciliation

    449067 Discuss the purpose of a bank reconciliation Discuss the purpose of a bank reconciliation. 300 Words APA w/ References The bank reconciliation helps you find out if what you have recorded in the books of the firm matches what has cleared the

  • How does an EFT Payment for a Bill Work?

    d) subtracted from the book balance of a bank reconciliation. Answer: subtracted from the bank balance of a bank reconciliation.

  • Bank reconciliation purpose

    290327 Bank reconciliation purpose Discuss the purpose of a bank reconciliation. 300 words apa Dear student, Discuss the purpose of a bank reconciliation Bank Reconciliation statement: Bank reconciliation statement is the statement showing

  • Bank reconciliation as an internal control tool

    630526 Bank reconciliation as an internal control tool Describe how the bank reconciliation can be used as an internal control tool for cash. Also, should the same person that receives cash payments prepare the bank reconciliation?

  • Non Sufficient Funds Checks

    561802 Non Sufficient Funds Checks Non sufficient funds (NSF) checks would be: - subtracted from the book balance of a bank reconciliation. - subtracted from the bank balance of a bank reconciliation.

  • Accounting: Bank reconciliation

    270404 Bank reconciliation, accounting 1. What's bank reconciliation? Is it important to reconcile books on a regular basis? What are the steps?

  • Answer to "Bank Reconciliation" question

    196006 Answer to "Bank Reconciliation" question See attached file. PART V ? BANK RECONCILIATION A review of the November 30 bank statement and other data of Jones Company reveals the following: 1.

  • Jones Company and Santos Company

    214612 Jones Company had checks outstanding totaling $5,400 on its June bank reconciliation. In July, Jones Company issued checks totaling $38,900 5. Jones Company had checks outstanding totaling $5,400 on its June bank reconciliation.

  • Bank Reconciliation for Lee.com

    248574 Bank Reconciliation for Lee.com Prepare a bank reconciliation using the following information: Bank Statement Date Checks Deposits Balance 7/1 Balance

  • Imagine you are the accountant for Floral Design Company and

    395314 Imagine you are the accountant for Floral Design Company and are assigned to prepare the monthly bank reconciliation. Complete this task, by using the data below: 1. Complete the bank reconciliation for the month of June. 2.

View More Related Solutions