Need advise in how to set up?
On, April 1, 2015, Lester Company received a bank statement that showed a balance of $ 8,950. Lester showed a $8,000 checking account balance. The bank did not return check No. 115 for $750 or check No. 118 for $370.00. A $900.00 deposit made on March 31 was in transit. The bank charge Lester $20 for check printing nad $250 for NSF checks. The bank also collected a $1,400 note for Lester. Lester forgot to record an $400 withdrawal at the ATM. Prepare a bank reconciliation.
Need help in setting this up
400
To set up a bank reconciliation, you'll need to follow these steps:
Step 1: Gather the necessary information
- Collect the bank statement that shows the ending balance ($8,950 in this case).
- Retrieve your own records, including your checkbook and any other financial documentation, to determine your checking account balance ($8,000 in this case).
Step 2: Identify outstanding checks
- Compare the checks you have recorded with the ones mentioned in the problem statement (check No. 115 for $750 and check No. 118 for $370).
- If these checks are not present in your bank statement, they are considered outstanding.
Step 3: Identify deposits in transit
- Look for any deposits made close to the end of the statement period but are not listed on the bank statement.
- In this case, there is a $900 deposit made on March 31 that has not yet been included in the bank statement.
Step 4: Identify bank charges and fees
- Note any fees or charges imposed by the bank and not yet recorded in your own records.
- In this case, the bank charged $20 for check printing and $250 for NSF checks.
Step 5: Account for any bank collections
- Take into account any payments or collections made by the bank on your behalf but not yet recorded in your own records.
- In this case, the bank collected a $1,400 note for Lester.
Step 6: Identify any unrecorded withdrawals or deposits
- Identify any transactions, such as ATM withdrawals or deposits, that have not been recorded in your records.
- In this case, Lester forgot to record a $400 withdrawal made at the ATM.
Step 7: Prepare the reconciliation
- Calculate the adjusted bank balance by adding or subtracting the outstanding checks, deposits in transit, bank charges, and unrecorded collections.
- Adjust your checking account balance by adding or subtracting any unrecorded withdrawals or deposits.
- Compare the adjusted bank balance with your adjusted checking account balance to ensure they match.
Following these steps will help you set up and prepare a bank reconciliation for your records.