Question

On July 31, 2022, Carla Vista Co. had a cash balance per books of $6,335.00. The statement from Dakota State Bank on that date showed a balance of $7,885.80. A comparison of the bank statement with the Cash account revealed the following facts.
1. The bank service charge for July was $19.00.
2. The bank collected $1,715.00 from a customer for Carla Vista Co. through electronic funds transfer.
3. The July 31 receipts of $1,394.30 were not included in the bank deposits for July. These receipts were deposited by the company in a night deposit vault on July 31.
4. Company check No. 2480 issued to L. Taylor, a creditor, for $374.00 that cleared the bank in July was incorrectly entered in the cash payments journal on July 10 for $347.00.
5. Checks outstanding on July 31 totaled $2,046.10.
6. On July 31, the bank statement showed an NSF charge of $770.00 for a check received by the company from W. Krueger, a customer, on account.
Required:
Prepare the bank reconciliation as of July 31. (List items that increase balance as per bank & books first.)

Answer 1

Explanation:

The preparation of the bank reconciliation statement is presented below in the attachment.

As we know that

The Bank reconciliation works with the balance of the bank statement and the balance of the cash statement. The aim is to compare those two statements to allow the organisation to operate smoothly.  

There are various transactions because of which the balance of the bank statement and the balance of the cash statement do not match. We change the transactions correctly to match those statements.

The bank error is

= $374 - $347

= $27