Question

On July 31, 2022, Blossom Company had a cash balance per books of $6,295.00. The statement from Dakota State Bank on that date showed a balance of $7,845.80. A comparison of the bank statement with the Cash account revealed the following facts.
1. The bank service charge for July was $24.00.
2. The bank collected $1,675.00 from a customer for Blossom Company through electronic funds transfer.
3. The July 31 receipts of $1,349.30 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 $354.00 that cleared the bank in July was incorrectly entered in the cash payments journal on July 10 for $345.00.
5. Checks outstanding on July 31 totaled $1,988.10.
6. On July 31, the bank statement showed an NSF charge of $730.00 for a check received by the company from W. Krueger, a customer, on account.
Required:
a. Prepare the bank reconciliation as of July 31.

Answer 1

Answer:

Adjusted book/Bank balance = $7,207

Explanation:

                           Blossom Company

               Bank Reconciliation Statement

             For the year ended July 31, 2022

Bank balance as per July 31                    $7,845.80

Add: Deposit in Transit                             $1,349.30

Less: Outstanding check                        $(1,988.10)

Adjusted bank balance                               $7,207

Cash balance as per July 31                    $6,295.00

Add: Collection from EFT                         $ 1,675.00

Less: Bank service charge      $(24.00)

NSF check                              $(730.00)

Error in bank                              $(9.00)                    

Total deduction                                        $(763.00)  

Adjusted book balance                               $7,207

Therefore, the bank balance and book balance have been adjusted through bank reconciliation statement.