Question

On July 31, 2022, Ivanhoe Company had a cash balance per books of $6,310.00. The statement from Dakota State Bank on that date showed a balance of $7,860.80. A comparison of the bank statement with the Cash account revealed the following facts.1. The bank service charge for July was $18.00.2. The bank collected $1,690.00 from a customer for Ivanhoe Company through electronic funds transfer.3. The July 31 receipts of $1,370.30 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 $2,003.10.6. On July 31, the bank statement showed an NSF charge of $745.00 for a check received by the company from W. Krueger, a customer, on account.Prepare the bank reconciliation as of July 31.

Answer 1

Answer:

Balance at Bank as per cash book (up to date)    $7,228,00

Add Unpresented Cheques                                    $2,003.10

Less Lodgements not yet credited                        ($1,370.30)

Balance as per Bank Statement                             $7,860,80

Explanation:

Step 1 Bring the Cash Book Balance Up to Date

Cash Book

Debit :

Balance as at July 31, 2022                    $6,310.00

Ivanhoe Company; Trade Receivable   $1,690.00

Totals                                                       $8,000.00

Credit:

Bank service charge                                    $18.00

Understated : L. Taylor                                 $9.00

NSF charge                                                $745.00

Balance (up to date)                                $7228,00

Totals                                                        $8,000.00

Step 2 Prepare a Bank Reconciliation Statement

Balance at Bank as per cash book (up to date)    $7,228,00

Add Unpresented Cheques                                    $2,003.10

Less Lodgements not yet credited                        ($1,370.30)

Balance as per Bank Statement                             $7,860,80