The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31.On July 31, the company’s Cash account has a $25,640 debit balance, but its July bank statement shows a $27,003 cash balance.Check Number 3031 for $1,110, Check Number 3065 for $331, and Check Number 3069 for $1,878 are outstanding checks as of July 31.Check Number 3056 for July rent expense was correctly written and drawn for $1,280 but was erroneously entered in the accounting records as $1,270.The July bank statement shows the bank collected $6,000 cash on a note for Branch. Branch had not recorded this event before receiving the statement.The bank statement shows an $805 NSF check. The check had been received from a customer, Evan Shaw. Branch has not yet recorded this check as NSF.The July statement shows a $9 bank service charge. It has not yet been recorded in miscellaneous expenses because no previous notification had been received.Branch’s July 31 daily cash receipts of $7,132 were placed in the bank’s night depository on that date but do not appear on the July 31 bank statement. ### Bank Reconciliation Template#### Required:1. Prepare the bank reconciliation for this company as of July 31.#### BRANCH COMPANY**Bank Reconciliation****July 31**| Bank statement balance | | Book balance | ||------------------------|-------------------------------------|-------------------------|-------------------------------------|| | | | || **Add:** | | **Add:** | || | | | || 0 | | 0 | || 0 | | 0 | || **Deduct:** | | **Deduct:** | || | | | || | | | || 0 | | 0 | || 0 | | 0 | || **Adjusted bank balance** | $0 | **Adjusted book balance** | $0 |#### Explanation:This template assists in preparing the bank reconciliation for a company. Bank reconciliation is a process that explains the difference between the bank balance shown in an organization's bank statement, as supplied by the bank, and the corresponding amount shown in the organization's own accounting records at a specific point in time.Here's how to fill out the template:- **Bank statement balance**: Record the ending balance shown on the company’s bank statement.- **Book balance**: Record the ending balance in the company's ledger or book as of July 31.- **Add**: List any items that need to be added to the bank or book balance, such as deposits in transit or bank credits not yet recorded.- **Deduct**: List any items that need to be deducted from the bank or book balance, such as outstanding checks or bank charges not yet recorded in the books.- **Adjusted bank balance** and **Adjusted book balance**: After making the additions and subtractions, the adjusted balances should match, indicating that the bank reconciliation is complete.

Bank reconciliation statement is the one which is prepared by the entity to reconcile the…

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Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 18P

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Question

The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31.

On July 31, the company’s Cash account has a $25,640 debit balance, but its July bank statement shows a $27,003 cash balance.
Check Number 3031 for $1,110, Check Number 3065 for $331, and Check Number 3069 for $1,878 are outstanding checks as of July 31.
Check Number 3056 for July rent expense was correctly written and drawn for $1,280 but was erroneously entered in the accounting records as $1,270.
The July bank statement shows the bank collected $6,000 cash on a note for Branch. Branch had not recorded this event before receiving the statement.
The bank statement shows an $805 NSF check. The check had been received from a customer, Evan Shaw. Branch has not yet recorded this check as NSF.
The July statement shows a $9 bank service charge. It has not yet been recorded in miscellaneous expenses because no previous notification had been received.
Branch’s July 31 daily cash receipts of $7,132 were placed in the bank’s night depository on that date but do not appear on the July 31 bank statement.

### Bank Reconciliation Template

#### Required:
1. Prepare the bank reconciliation for this company as of July 31.

#### BRANCH COMPANY
**Bank Reconciliation**

**July 31**

| Bank statement balance | | Book balance | |
|------------------------|-------------------------------------|-------------------------|-------------------------------------|
| | | | |
| **Add:** | | **Add:** | |
| | | | |
| 0 | | 0 | |
| 0 | | 0 | |
| **Deduct:** | | **Deduct:** | |
| | | | |
| | | | |
| 0 | | 0 | |
| 0 | | 0 | |
| **Adjusted bank balance** | $0 | **Adjusted book balance** | $0 |

#### Explanation:
This template assists in preparing the bank reconciliation for a company. Bank reconciliation is a process that explains the difference between the bank balance shown in an organization's bank statement, as supplied by the bank, and the corresponding amount shown in the organization's own accounting records at a specific point in time.

Here's how to fill out the template:
- **Bank statement balance**: Record the ending balance shown on the company’s bank statement.
- **Book balance**: Record the ending balance in the company's ledger or book as of July 31.
- **Add**: List any items that need to be added to the bank or book balance, such as deposits in transit or bank credits not yet recorded.
- **Deduct**: List any items that need to be deducted from the bank or book balance, such as outstanding checks or bank charges not yet recorded in the books.
- **Adjusted bank balance** and **Adjusted book balance**: After making the additions and subtractions, the adjusted balances should match, indicating that the bank reconciliation is complete.

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