The following relates to Tim’s Business entity, not Tim the owner. Tim’s business prepares monthly bank reconciliations of his cheque account balance. The bank statement for March 2015 indicated the following:

Balance, March 31, 2015……………………………………………………………$7,920

Bank service charges for March…………………………………………………….20

Interest earned during March……………………………………………………….30

NSF (bounced) cheque from a customer previously deposited by Tim…………….32

Collection of note ($1,000) and the related interest ($40) from customer………….1,040

An analysis of cancelled cheques and deposits and the records of Tim revealed the following items:

Cheque account balance per Tim's accounting records March 31………………….$7,170

Outstanding cheques as of March 31……………………………………………….952

Deposits in transit on March 31…………………………………………………….1,310

Error in recording cheque # 267 issued by Tim…………………………………….90

The correct amount of cheque # 267 is $340, but it was recorded as a cash disbursement of

$430. The cheque was issued to pay for inventory purchased. The cheque was written correctly and appeared on the bank statement correctly it was just recorded in Tim’s Business accounting records incorrectly.

Required

A) Prepare bank reconciliation in proper form for March 31, 2015.

B) What amount would Tim report his cash balance in the statement of financial position (balance sheet) at March 31, 2015?

C) Record the transaction (adjustments) Tim will need as a result of this bank reconciliation process?

Answer rating: 100% (QA)

A Tims Business entity Bank Reconciliation 31Mar15 Balance March 31 2015 7920 Ad... View the full answer