Preparing a bank reconciliation and journal entries and reporting cash:
Hill's Company's June 30, 2013 bank statement and the June ledger account for cash are summarized here:

Bank Statement
Checks Deposits Other Balance
Balance June 1, 2013, $7,200
Deposits during June $18,000 $25
Checks cleared during June $19,100 $6,100
Bank service charges $30 $6,070
Balance June 30 2013 $6,070

Cash(A)

June 1 Balance 6,800 June Deposits 19,000 June 30 6,40019,400 checks written June.

Required:

a. Prepare a bank reconciliation. A comparison of the checks written with the checks that have cleared the bank shows outstanding checks of $700. Some of the checks that cleared in June were written prior to June. No deposits in transit were noted in May, but a deposit is in transit at the end of June.
b. Give any journal entries that should be made as a result of the bank reconciliation.
c. What is the balance in the Cash account after the reconciliation entries?
d. In addition to the balance in its bank account Hills Company also has $300 cash on hand. This amount is recorded in a separate T account called Cash on Hand. What is the total amount of cash that should be reported on the balance sheet at June 30?

A.

*Workings for Adjusted Cash book.

Balance as at June 30 2013 = $6,400

Add Checks not yet presented = $700

Deduct Deposits not yet credited = ($19,000 minus $18,000) = $1,000

Deduct Bank Charges = $30

Adjusted Balance = $6,070

*Bank reconciliation statement as at June 30 2013

June 30 Closing Bank Statement = $6,070

Balance per adjusted cash book (above) = $6,070

Difference = $0

B. Journal entries required :

Dr. Cash with $700

Cr. Bank Account with $700

(Being un-presented checks for the month)

Dr. Bank charges Account with $30

Cr. Bank Account with $30

(Being bank charges in June)

Dr. Cash with $1,000

Cr. Bank with $1,000

(Being deposits not yet credited to Bank in June)

C. Balance in the reconciled account is $6,070

D. Adjusted cash balance = $6,070

Add cash in hand = $300

Total cash Account = $6,370.

Explanation:

A Bank Reconciliation statement is approach conducted by the Treasury analyst to verify that the entries in their bank and the records maintained in the office have a perfect tie. Except for bank charges which will be included to the adjusted cash book, the entries in either should perfectly mirror the other.

The steps are to adjust the cashbook to cover the entries not yet recognized in the bank records . and then comparing this balance to the balance in the bank statement.

A.

*Workings for Adjusted Cash book.

Balance as at June 30 2013 = $6,400

Add Checks not yet presented = $700

Deduct Deposits not yet credited = ($19,000 minus $18,000) = $1,000

Deduct Bank Charges = $30

Adjusted Balance = $6,070

*Bank reconciliation statement as at June 30 2013

June 30 Closing Bank Statement = $6,070

Balance per adjusted cash book (above) = $6,070

Difference = $0

B. Journal entries required :

Dr. Cash with $700

Cr. Bank Account with $700

(Being un-presented checks for the month)

Dr. Bank charges Account with $30

Cr. Bank Account with $30

(Being bank charges in June)

Dr. Cash with $1,000

Cr. Bank with $1,000

(Being deposits not yet credited to Bank in June)

C. Balance in the reconciled account is $6,070

D. Adjusted cash balance = $6,070

Add cash in hand = $300

Total cash Account = $6,370.

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