# Bank Reconciliation for Green Expo Corp - August 2016## Reconciling Items1. **Ending Balance**: The bank statement for August 2016 shows an ending balance of $3,490.2. **Service Charge**: On August 31, the bank statement shows a charge of $35 for maintaining the checking account.3. **Returned Check**: On August 28, there is a return item of $100 plus a $10 bank fee. This is for a customer's check returned due to insufficient funds. The check is marked "do not redeposit."4. **Check Printing Charge**: A charge of $80 is noted for check printing on August 20.5. **Interest Earned**: The bank statement shows an addition of $8 for interest earned on August 31.6. **Note Receivable Collection**: A note receivable of $1,000 was collected on August 29 and deposited. Additionally, the bank withdrew $40 as a fee for this transaction.7. **Cash Account Balance**: At the end of August, the company’s cash account shows a balance of $967.8. **Uncleared Checks**: As of August 31, $3,021 of checks written in August and $200 from June had not cleared the bank.9. **Cash Receipt Timing**: A cash receipt of $1,450 recorded on August 31 was deposited on September 1.10. **Cash Sales Recording**: On August 29, the cash account shows sales of $145. The bank confirmed the correct amount as $154.## Requirements- **Bank Reconciliation**: Prepare the reconciliation as of August 31, 2016. - **Journal Entries**: Prepare the associated entries, dated August 31, 2016.

The financial transactions related to cash and bank are recorded by the businesses in the cash book. On the other hand, bank also keeps a record of the transactions related to the account of the businesses in their bank and send a Bank Statement at the end of the period. Sometimes, there may be a difference in the cash book balance and balance as per Bank Statement. The reasons for the same can either be errors in recording by the business/bank or the difference in timing of recording. The businesses look for errors, rectify them and then match their cash book balance and balance as per statement at the end of the period. If the balance does not match, it is important to determine the cause for the difference and display them in a statement and then tally the two balances. This statement is called Bank Reconciliation Statement. In the transactions 1-9 (in the ques above), there is no error in recording by the company and so the entry is passed only for transaction number 10. DATE PARTICULARS DEBIT CREDIT Aug 31 DEBIT CASH BOOK BY $9 (For Transaction number 10 in ques, since the amount was wrongly entered only in the cash book and not in the SALES account, therefore, there was single side effect. So, double entry won't be passed here.) Adjusted Cash Book Balance = $967+$9= $976 The Adjusted Cash Book Balance(after rectification) as on Aug 31, 2016 = $976 Balance as per Bank Statement on Aug 31, 2016 = $3,490 The Bank Reconciliation Statement for showing the causes of difference is presented below: GREEN EXPO CORP. BANK RECONCILIATION STATEMENT Month End August 31, 2016 PARTICULARS AMOUNT Balance as per Bank Statement on August 31, 2016 $3,490.00 ADD: CASH RECEIVED BUT NOT DEPOSITED Cash received but deposited in bank on Sept 1 $1,450.00 LESS: OUTSTANDING CHECKS Issued in June ($200.00) Issued in August ($3,021.00) Adjusted Cash Balance $1,719.00 Balance as per Cash Book on August 31, 2016 $976.00 ADD: Note receivable collected by bank $1,000.00 Interest earned during August $8.00 LESS: Service charge ($35.00) NSF Check ($100.00) Bank Fee ($10.00) Check Printing Charge ($80.00) Collection Charges ($40.00) Adjusted Cash Balance $1,719.00 NOTE: The amounts shown in the parenthesis (..) in the statement are the negative amounts.