CompLand Corporation is engaged in purchases and sales of desktop computer. All receipts from customers and payments to suppliers are made by checks. The company adjusts its accounts annually and financial year-end date is on 31 December.

The cash account in the general ledger of CompLand Corporation showed a balance of $14,705 on 31 December 2020. The balance included $460,000 checks received from customers and

$380,000 checks written to suppliers in December. On the other hand, the company’s bank statement showed a balance of $82,471 at the same date. The following information was found to explain the difference between the cash balance in accounting record and balance shown in bank statement:

1.            Bank service charges totaled $800.

2.            A credit memorandum enclosed with the December bank statement indicated that a 6-month 6% note receivable of $4,000, effective on 1 July 2020, had been collected (including principal and interests for the entire borrowing period) and the proceeds credited to the company account.

3.            On 20 December 2020, the company purchased $500 supplies, paid by cash. However, the accountant forgot to record the transaction. The supplies had not been used in 2020.

4.            A $50,000 deposits was erroneously credited to the bank account by the bank.

5.            The bank statement in December 2020 showed that amounts received from customers and paid to suppliers were $440,000 and $350,000 respectively.

6.            A $5,000 electricity charge had been directly debited to the bank account.

7.            The company wrote a $10,000 check in November 2020 and the check had not shown in the bank statement yet.

8.            A $615 check issued for the payment of office equipment had been recorded as $561 in company’s record.

Required:

Prepare Bank Reconciliation for CompLand Corporation at 31 December 2020.

 

Answer rating: 100% (QA)

CompLand Corporation Bank Reconciliation Statement as on 31 December 2020 Particulars Amount Balance ... View the full answer