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Bank Reconciliation Statement Set out below are the Bank Account and Bank Statement of Michael Regan for the month of April 2013 - Leaving Cert Accounting - Question 3 - 2013
Question 3
Bank Reconciliation Statement Set out below are the Bank Account and Bank Statement of Michael Regan for the month of April 2013. Dr Bank Account... show full transcript
Worked Solution & Example Answer:Bank Reconciliation Statement Set out below are the Bank Account and Bank Statement of Michael Regan for the month of April 2013 - Leaving Cert Accounting - Question 3 - 2013
Step 1
Show Michael Regan’s Adjusted Bank Account and bring down the adjusted balance.
Answer
To prepare the Adjusted Bank Account for Michael Regan, follow these steps:
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Start with the opening balance brought forward (Balance b/d) from April 1, which is €19,350.
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Add Interest Received amounting to €140 received in April.
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Adjust for deducting the non-credited items:
- Standing Order: €380
- Cheque dishonored: €134
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The adjusted balance (Balance c/d) at the end of April will be calculated as follows:
Adjusted Bank Account:
Date Details Debit (€) Credit (€) Apr Balance b/d 19,350 Apr Interest Received 140 Apr Standing Order 380 Apr Cheque Dishonored 134 Balance c/d 19,490 -
The final adjusted balance carried down (Balance c/d) is €19,490.
Step 2
Prepare a statement on 30/04/2013 reconciling the adjusted Bank Account balance with the Bank Statement balance.
Answer
To reconcile the adjusted cash book balance with the bank statement:
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The adjusted cash book balance is €17,676.
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Add uncashed cheques as follows:
- €4,900 for 432107 Insurance
- €2,300 for 432109 T. Fallon.
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Sum up the uncashed cheques:
- Total = €4,900 + €2,300 = €7,200.
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The total balance now is:
- €17,676 + €7,200 = €24,876.
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Subtract uncredited lodgement amounting to €13,500.
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The balance so far = €24,876 - €13,500 = €11,376.
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Lastly, adjust for the bank error:
- €190 adjustment, leading us to:
- Final balance as per the bank statement = €11,186.
This way, you reconcile the adjusted cash book with the bank statement effectively.