Prepare a bank reconciliation
- Ending Cash balance per bank
P 18,972.67
- Ending Cash balance per book
P 16,697.76
- Deposit in transit
P 3,251.42
- Bank Service Charge
P 20.00
- Outstanding Checks
P 4,163.51
- Note Collected by bank including P 50 interest (Owner yet beennot notified)
P 2,150
- Error by bank - check drawn by corp. was charged to owner account
P 713.18
- A sale and deposit of P 1,628 were entered in the sales journal and cash receipts journal as 1,682.
So is I'm get back in payment settlements 18972.67 JD Morgan chase Bank
To prepare a bank reconciliation, follow these steps:
1. Start with the ending cash balance per bank and the ending cash balance per your book. In this case, the ending cash balance per bank is P18,972.67 and the ending cash balance per book is P16,697.76.
2. Identify any deposits in transit. These are deposits that have been made but have not yet been recorded by the bank. In this case, the deposit in transit is P3,251.42.
3. Consider any bank service charges. These charges are typically deducted by the bank and may not be reflected in your book. In this case, the bank service charge is P20.00.
4. Look for any outstanding checks. These are checks that have been issued but have not yet cleared the bank. In this case, the outstanding checks amount to P4,163.51.
5. Take into account any notes collected by the bank. These are funds collected by the bank on your behalf, which you may not be aware of. In this case, the note collected by the bank, including P50 in interest, is P2,150.
6. Note any errors made by the bank. These could include the bank charging a check to the wrong account. In this case, there is an error of P713.18, where a check drawn by the corporation was charged to the owner's account.
7. Finally, identify any errors made by your bookkeeper. Here, a sale and deposit of P1,628 were entered incorrectly in the sales journal and cash receipts journal as P1,682.
Now, let's calculate the adjusted cash balance per your records:
Starting with the cash balance per book (P16,697.76), add the deposits in transit (P3,251.42), note collected by the bank (P2,150), and the correction for the sales and deposit (subtracting P1,682 - P1,628 = P54). This results in an adjusted cash balance of:
P16,697.76 + P3,251.42 + P2,150 - P54 = P21,045.18
Next, calculate the adjusted cash balance per the bank:
Starting with the cash balance per bank (P18,972.67), add the outstanding checks (P4,163.51), and subtract the bank service charge (P20). This results in an adjusted cash balance of:
P18,972.67 + P4,163.51 - P20 = P23,116.18
Finally, compare the adjusted cash balance per your records (P21,045.18) with the adjusted cash balance per the bank (P23,116.18). The difference between these two amounts is the reconciling item.
P23,116.18 - P21,045.18 = P2,071
The reconciling item is P2,071, which represents the differences between your book and the bank statement. This difference should be investigated and resolved to ensure your book and the bank are in agreement.