BANK RECONCILIATION STATEMENT

Company A's bank statement dated Dec 31, 2017 shows a balance of 12,297,360.00. The company's
cash records on the same date show a balance of 11,598,395.00 Following additional information is
available:

1. Following checks issued by the company to its customers are still outstanding:
No. 846 issued on Nov 29 160,000.00 2.
No. 875 issued on Dec 26 24,605.00
No. 878 issued on Dec 29 137,500.00
No. 881 issued on Dec 31 93,250.00
A deposit of 200,000.00 made on Dec 31 does not appear on bank statement.
3. An NSF check of 425,000.00 was returned by the bank with the bank statement.
4. The bank charged 25,000.00 as service fee.
5. Interest income earned on the company's average cash balance at bank was 618,610.00.
6. The bank collected a note receivable on behalf of the company. Amount received by the bank on
the note was 275,000.00. This includes 25,000.00 interest income. The bank charged a collection
fee of 5,000.00.
7. A deposit of 215,000.00 was incorrectly entered as 170,000.00 in the company's cash records.

Prepare a bank reconciliation statement using the above information.

Solution:
Company A
Bank Reconciliation
December 31, 2011

Balance as per Bank, Dec 31 1,229,736.00

Add: Deposit in Transit 20,000.00
1,249,736.00
Less: Outstanding Checks:
No. 846 issued on Nov 29 16,000.00
No. 875 issued on Dec 26 2,460.50
No. 878 issued on Dec 29 13,750.00
No. 881 issued on Dec 31 9,325.00
41,535.50
Adjusted Bank Balance 1,208,200.50

Balance as per Books, Dec 31 1,159,839.50

Add:
Interest Income from Bank 61,861.00
Note Receivable Collected by Bank 25,000.00
Interest Income from Note Receivable 2,500.00
Deposit Understated 4,500.00
93,861.00
1,253,700.50
Less:
NSF Check 42,500.00
Bank Service Fee 2,500.00
Bank Collection Fee 500.00
45,500.00
Adjusted Book Balance 1,208,200.50