Bank Reconciliation The cash account of Mason Products revea

Bank Reconciliation The cash account of Mason Products reveals the following information: Cash Balance, 4/30 Deposits during May The bank statement for May contains the following information: Bank balance, 4/30 Add: Deposits during May 10,260 39,600 Cheques written during May 40,000 10,260 37,400 $47,660 $38,500 140 $50 Less: Cheques paid during May NSF cheque from Higgins, Inc. Bank service charges $38,690 Bank balance, 5/31 $8,970 A comparison of detailed company records with the bank statement indicates the following information: Deposits in transit Outstanding cheques The bank amounts are determined to be correct. At 4/30 $900 550 At 5/31 $2,200 1,500

Solution

PART 1

Mason products

Bank reconciliation schedule

May 31

Cash balance from bank statement

8970

Add: deposit in transit

2200

Less: outstanding cheques

1500

Adjusted cash balance

9670

Cash balance from company records:

9860

Less:

Service charges

50

NSF cheque

140

190

Adjusted cash balance

9670

=10260+39600-40000 = 9860

PART 2

May 31

Bank service charge expenses

50

Cash

50

(record bank service charge)

May 31

Accounts receivable

140

Cash

140

(record NSF cheque)

PART 3

The cash reported on the statement of financial position at May 31 is adjusted cash balance i.e. 9670

Cash balance from bank statement		8970
Add: deposit in transit		2200
Less: outstanding cheques		1500
Adjusted cash balance		9670
Cash balance from company records:		9860
Less:
Service charges	50
NSF cheque	140	190
Adjusted cash balance		9670