Youssef operates a business as a sole trader. Youssef 's bank statement for the month of August
Question:
Youssef operates a business as a sole trader. Youssef 's bank statement for the month of August 2020 showed a balance of $6,235. The company's cash book showed a debit balance of $7,300 at August 31. The following information is available for Youssef Company:
The bank statement indicated a monthly service charge of $50.
Youssef Company made a deposit $3,200 on August 31, but this deposit did not appear on the bank statement until September 5.
A Cheque was correctly written and paid by the bank for $405. The cash book reflects an entry for the Cheque as a debit to Accounts Payable and a credit to Cash in Bank for $450.
A Cheque payable to XYZ Company was recorded in the cash book and cleared by the bank for $620. A review of the accounts payable subsidiary ledger shows a $90 credit balance in the account of XYZ Company and that the payment to them should have been for $710.
The bank collected an account receivable of $600 from one of Youssef Company’s customers.
The bank also collected interest revenue for Youssef Company of $60.
The bank also returned a nonsufficient funds Cheque for $420 from ABC, one of Youssef Company’s customers.
Cheques for $1,900 were written by Youssef Company and sent to the respective suppliers, but these Cheques do not appear on the bank statement.
Required:
1- Prepare a bank reconciliation statement.
2- State the amount of cash at bank that should appear in Youssef Company’s balance sheet on August 31, 2020.Why?
Financial Accounting
ISBN: 978-0077862268
2nd edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann