S4-4 The Cash account of SWITZER Ltd. reported a balance of $2,500 at August 31, 2020. Included were outstanding cheques totalling $900 and an August 31 deposit of $500 that did not appear on the bank statement. The bank statement, which came from HSBC Bank, listed an August 31, 2020, balance of $3,405. Included in the bank balance was an August 30 collection of $550 on account from a customer who рays the bank directly. The bank statement also shows a $20 service charge, $10 of interest revenue that SWITZER earned on its bank balance, and an NSF cheque for $35. Prepare a bank reconciliation to determine how much cash SWITZER actually has at August 31, 2020.

S4-4 The Cash account of SWITZER Ltd. reported a balance of $2,500 at August 31, 2020. Included were outstanding cheques totalling $900 and an August 31 deposit of $500 that did not appear on the bank statement. The bank statement, which came from HSBC Bank, listed an August 31, 2020, balance of $3,405. Included in the bank balance was an August 30 collection of $550 on account from a customer who рays the bank directly. The bank statement also shows a $20 service charge, $10 of interest revenue that SWITZER earned on its bank balance, and an NSF cheque for $35. Prepare a bank reconciliation to determine how much cash SWITZER actually has at August 31, 2020.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Bank Reconciliation Statement

As a commerce student, we all know that every business has to maintain a cash book to maintain all his cash and bank transactions. A cash book is a book which has two columns, one cash column and one bank column.

Question

$4-4 The Cash account of SWITZER Ltd. reported a balance of $2,500 at August 31,
2020. Included were outstanding cheques totalling $900 and an August 31 deposit of
$500 that did not appear on the bank statement. The bank statement, which came from
HSBC Bank, listed an August 31, 2020, balance of $3,405. Included in the bank balance
was an August 30 collection of $550 on account from a customer who
pays
the bank
directly. The bank statement also shows a $20 service charge, $10 of interest revenue
that SWITZER earned on its bank balance, and an NSF cheque for $35.
Prepare a bank reconciliation to determine how much cash SWITZER actually has at
August 31, 2020.
S4-5 After preparing the SWITZER Ltd. bank reconciliation in Exercise S4-4, make
the company's journal entries for transactions that arise from the bank reconciliation.
Include an explanation with each entry.

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