The bank erroneously deducted $340.47 from the company's account when the actual amount of a check written by the company was $320.47. The company erroneously recorded a check it wrote for $353.39 as $542.39. The company recently made a $656.10 deposit that has not yet been reflected on the bank statement. The bank collected a $590.00 note receivable, plus $11.00 in interest, which has not been recorded in the company's records. Bank service charges of $20.00 have been assessed to the company's account. There are two checks outstanding (not yet appearing on the bank statement) that were written for $833.90 and $466.86. A $415.81 check from one of the company's customers, Phil Conners, was returned by the bank because of insufficient funds (NSF) in the customer's account. Prepare the bank reconciliation for Allez Co. Enter amounts to the nearest cent. Allez Co. Bank Reconciliation January 31, 2014 Cash balance per bank statement $ Add: Deposit not recorded by a bank (deposit in transit) $ Add: Bank error in charging check $ Deduct: Outstanding checks Adjusted balance $ Cash balance per company records $ Add: Proceeds of note collected by the bank, including interest $ Add: Error in recording check $ Deduct: Check returned for insufficient funds $ Deduct: Bank service charge Adjusted balance

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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Blueprint Connection: Cash and Bank Reconciliation

Cash and Cash Controls

Cash includes coins, paper currency, checks, money orders, and money deposited with a financial institution that the company can withdraw at any time. The key to the classification of an amount as cash is that it be readily available to pay debts. Cash is a current asset reported on the Balance Sheet. Cash also includes items properly classified as cash equivalents. These are limited to investments that are readily convertible to known amounts of cash and have an original maturity to the investor of three months or less.

Bank Reconciliation

A bank reconciliation explains the causes for any differences between a company's cash balance on its bank statement and its cash balance on the books (that is, in the ledger. )

Allez Company's monthly bank statement shows an account balance of $6353.95. The cash balance in its ledger is $5375.10.

A thorough bank reconciliation investigation yields the following information:

The bank erroneously deducted $340.47 from the company's account when the actual amount of a check written by the company was $320.47.

The company erroneously recorded a check it wrote for $353.39 as $542.39.

The company recently made a $656.10 deposit that has not yet been reflected on the bank statement.

The bank collected a $590.00 note receivable, plus $11.00 in interest, which has not been recorded in the company's records.

Bank service charges of $20.00 have been assessed to the company's account.

There are two checks outstanding (not yet appearing on the bank statement) that were written for $833.90 and $466.86.

A $415.81 check from one of the company's customers, Phil Conners, was returned by the bank because of insufficient funds (NSF) in the customer's account.

Prepare the bank reconciliation for Allez Co. Enter amounts to the nearest cent.

Allez Co.
Bank Reconciliation
January 31, 2014
Cash balance per bank statement		$
Add: Deposit not recorded by a bank (deposit in transit)	$
Add: Bank error in charging check
		$
Deduct: Outstanding checks
Adjusted balance		$
Cash balance per company records		$
Add: Proceeds of note collected by the bank, including interest	$
Add: Error in recording check
		$
Deduct: Check returned for insufficient funds	$
Deduct: Bank service charge
Adjusted balance

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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