Organic Food Co.s cash account shows a $5,900 debit balance and Its bank statement shows $5.440 on deposit at the dlose of business on August 31. a. August 31 cash recelpts of $1.640 were placed in the bank's night depository after banking hours and were not recorded on the August 31 bank statement b. The bank statement shows a $160 NSF check from a customer, the company has not yet recorded this NSF check d. In reviewing the bank statement, an $120 check witten by Organic Fruits was mistakenly drawn against Organic Food's account e. The August 31 bank statement lists $60 in bank service charges; the company has not yet recorded the cost of these services. Prepare a bank reconciliation using the above information. ORGANIC FOOD CO. Bank Reconciliation August 31 Bank statement balance Book balance Add: Add: Deduct: Deduct: Adjusted bank balance Adjusted book balance
Organic Food Co.s cash account shows a $5,900 debit balance and Its bank statement shows $5.440 on deposit at the dlose of business on August 31. a. August 31 cash recelpts of $1.640 were placed in the bank's night depository after banking hours and were not recorded on the August 31 bank statement b. The bank statement shows a $160 NSF check from a customer, the company has not yet recorded this NSF check d. In reviewing the bank statement, an $120 check witten by Organic Fruits was mistakenly drawn against Organic Food's account e. The August 31 bank statement lists $60 in bank service charges; the company has not yet recorded the cost of these services. Prepare a bank reconciliation using the above information. ORGANIC FOOD CO. Bank Reconciliation August 31 Bank statement balance Book balance Add: Add: Deduct: Deduct: Adjusted bank balance Adjusted book balance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:### Bank Reconciliation for Organic Food Co.
Organic Food Co.’s cash account shows a $5,900 debit balance. However, their bank statement shows $5,440 on deposit at the close of business on August 31. There are several differences between the two records that need to be reconciled:
**Details:**
1. **August 31 cash receipts of $1,640** were placed in the bank’s night depository after banking hours and were not recorded on the August 31 bank statement.
2. **The bank statement shows a $160 NSF check** from a customer that the company has not yet recorded.
3. **Outstanding checks as of August 31 total $1,520.**
4. **A $20 check written by Organic Fruits** was mistakenly drawn against Organic Food’s account. This check needs to be rectified.
5. **The August 31 bank statement lists $60 in bank service charges** that the company has not yet recorded.
Based on the above information provided, here is the bank reconciliation:
---
#### ORGANIC FOOD CO.
##### Bank Reconciliation
##### August 31
| | Bank statement balance | | Book balance | |
|------------------|------------------------|--------|------------------------|--------|
| **Add:** | | | | |
| Deposits in Transit | $1,640 | | | |
| | | | | |
| **Total Additions** | $1,640 | | | |
| **Subtotal** | (A) | | | |
| **Deduct:** | Outstanding Checks | $1,520 | | |
| Banking Errors | $20 | | NSF Check | $160 |
| Service Charges | | | Bank Service Charges | $60 |
| **Total Deductions**| (B) | | | |
| **Adjusted Bank Balance**| | | Adjusted Book Balance | |
---
**Bank Statement Balance Reconciliation:**
- **Bank Statement Balance:** $5,440
- **Add:** Deposits in Transit: $1,640
- **Subtotal:** $7,080
- **Deduct:** Outstanding Checks: $1,520
- **Deduct:** Banking Errors: $20
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