On, April 1, 2015, Lester Company received a bank statement that showed a balance of $ 8,950. Lester showed a $8,000 checking account balance. The bank did not return check No. 115 for $750 or check No. 118 for $370.00. A $900.00 deposit made on March 31 was in transit. The bank charge Lester $20 for check printing nad $250 for NSF checks. The bank also collected a $1,400 note for Lester. Lester forgot to record an $400 withdrawal at the ATM. Prepare a bank reconciliation.
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To prepare a bank reconciliation, follow these steps:
Step 1: Start with the bank's ending balance
Bank statement balance: $8,950
Step 2: Compare the bank statement with the company's records
Company's checking account balance: $8,000
Step 3: Note any outstanding checks
Outstanding check No. 115: $750
Outstanding check No. 118: $370
Step 4: Find any deposits in transit
Deposit made on March 31: $900
Step 5: Add or subtract any additional items
Bank charges (check printing): $20
NSF checks (bounced checks): $250
Collected note: $1,400
Unrecorded withdrawal: $400
Step 6: Calculate the adjusted balance
Adjusted balance per bank: (Bank statement balance - Outstanding checks + Deposits in transit + Additional items)
Adjusted balance per bank: ($8,950 - $750 - $370 + $900 + $1,400 + $20 + $250)
Adjusted balance per bank: $11,400
Step 7: Compare the adjusted balance with the company's checking account balance
Adjusted balance per bank: $11,400
Company's checking account balance: $8,000
Step 8: Prepare the bank reconciliation statement
Bank reconciliation statement:
Bank statement balance: $8,950
Adjusted balance per bank: $11,400
Add:
Outstanding checks:
Check No. 115: $750
Check No. 118: $370
Subtract:
Unrecorded withdrawal: $400
Adjusted balance per books: $8,000
The adjusted balance per the company's books matches the adjusted balance per the bank reconciliation statement.
Note: Make sure to double-check all calculations and entries to ensure accuracy.
To prepare a bank reconciliation, we need to compare the company's records (the checking account balance according to Lester) with the bank statement. We will go through each item step by step:
1. Start with Lester's record of the checking account balance, which is $8,000.
2. Add any outstanding deposits that have not yet appeared on the bank statement. In this case, the March 31 deposit of $900 is in transit, so add it to the balance:
$8,000 + $900 = $8,900
3. Subtract any outstanding checks that have not yet been cleared by the bank. In this case, check No. 115 for $750 and check No. 118 for $370 have not been returned by the bank, so deduct them from the balance:
$8,900 - $750 - $370 = $7,780
4. Look at the bank statement balance, which is $8,950.
5. Confirm any bank charges or fees that have been deducted from the account. In this case, the bank charged $20 for check printing and $250 for NSF (non-sufficient funds) checks, so subtract them from the balance:
$8,950 - $20 - $250 = $8,680
6. Consider any deposits or credits made directly by the bank. In this case, the bank collected a $1,400 note for Lester, so add it to the balance:
$8,680 + $1,400 = $10,080
7. Check for any errors or omissions made by the company. In this case, Lester forgot to record a $400 withdrawal made at the ATM, so deduct it from the balance:
$10,080 - $400 = $9,680
After going through these steps, we have reconciled the company's records with the bank statement. The adjusted balance is $9,680.