Question

On August 31, Year 1, the general ledger of a company shows a balance for cash of $7,844. Cash receipts yet to be deposited into the checking account total $3,238, and checks written by the academy but not yet processed by the bank total $1,325. The company's balance of cash does not reflect a bank service fee of $25 and interest earned on the checking account of $36. These amounts are included in the balance of cash of $5,942 reported by the bank as of the end of August. Required: 1. Prepare a bank reconciliation to calculate the correct ending balance of cash on August 31, Year 1. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1

Answer:

Correct ending balance          7855

Explanation:

Cash                                           7844

 

Books  

Cash receipts pending on bank  -3238

Checks written                            1325

 

Banks  

Bank service fee                             -25

Interest earned                              36

 

Bank conciliation                           5942

Bank account                                  5942

 

                                         7844

Correct ending balance  7855