Financial accounting I – Bank reconciliation statement
BBA | BBA-BI | BBA-TT | BCIS 1st
PU 2010 Fall Q. No. 2
The following information is available to assist you in preparing a bank reconciliation statement for Bamboo Catering on March 31, 1998.
The balance of the March 31, 1998, bank statement is Rs. 6,506.10.
Not included in the bank statement is a deposit made by Bamboo’s late on March 31 in the amount of 423.
A comparison between the cancelled checks listed on the bank statement and the company records indicated that the following checks are outstanding at March 31:
No. 112 Rs. 42.92
No. 117 Rs. 307
No. 120 Rs. 10.58
No. 122 Rs. 75.67
- The bank acts as a collection agency for checks returned for insufficient funds. The March bank statement indicates that one such check in the amount of Rs. 45 was collected and deposited and a collection fee Rs. 4.50 was charged.
- Interest earned on the checking account and credited to Bamboo’s account during March was Rs. 4.30. Miscellaneous bank service charges amounted to Rs. 22.
- A comparison between the deposits listed on the bank statement and the company’s books revealed that a customer’s check in the amount of Rs. 1.250 appears on the bank statement in March but never credited to the customer’s account on the company’s books.
- The comparison of checks cleared per the bank statement with those per the books revealed that the wrong amount was charged to the company’s account for a check. The amount of the check was Rs. 990. The proof machine-encoded the check. The amount of the check was Rs. 909, which is charged against the company’s account.
a. A Bank Reconciliation Statement in good form (follow the format used in the text book). [ 10 ]
b. The necessary journal entries on the books of Bamboo Caterings. [ 5 ]
Bank Reconciliation Statement
March 31, 1998
|Balance as per bank statement|
Add: Deposit in transit
Less: Outstanding checks
Check No. 112
Less: Errors in recording (990-909)
|Adjusted cash balance per bank statement||Rs. 6,411.93|
|Balance as per company’s book|
Add: Collection & deposited by bank
Add: Interest earned
Customer checks collected by the bank
Less: Collection fee
Less: Bank service charged
|Adjusted balance as per company’s book||Rs. 6,411.93|
Cash a/c Dr. Rs. 1,299.30
Interest revenue a/c Rs. 4.30
Account receivable a/c Rs. 1,295
(To record the interest revenue and collection from customer’s collected by the bank)
Collection fee a/c Dr. Rs. 4.50
Bank service charges a/c Dr. Rs. 22
Cash a/c Rs. 26.50
(To record the collection fee and bank service charge made by the bank)