Prepare a bank reconciliation for Cole Co. assuming the following as of May 31. Use the worksheet provided in the Ch 7 Module: 1) The company's cash account as a debit balance of: $95,250 2) The bank statement shows a balance of: $82,500 3) April 30 outstanding checks: $11,317 5) A credit memorandum was received by the bank, but not recorded by Cole Co. by May 31 a) Cash collected by the bank: $18,000 b) Collection fee deducted by bank: $45 6) Check 1115 was written and drawn for $1,350 but was erroneously entered in the accounting records as $1,050. The check was for rent. 7) May 31st daily cash sales were deposited but did not appear on the May 31 bank statement. $41,750 8) Interest earned, but not recorded:

Cole Co.

Bank Reconciliation Statement

Balance as per cash account adjusted $112,933

add uncredited deposits                             11,317

less Outstanding checks                         -41,750

Balance as per bank statement            $82,500

Explanation:

a) Data and Calculations:

Cash account debit balance = $95,250

Bank statement balance = $82,500

Outstanding checks = $11,317

Credit memorandum $18,000

Collection fee $45

Check 1115 for Rent Expense of $1,350 transposed as $1,050 = $300 ($1,350 - $1050)

Uncredited deposits = $41,750

Interest earned = $28

Cash Account Adjustment:

Cash account debit balance        $95,250

Debit:

Credit memorandum                      18,000

Interest earned                                      28

Credit:

Collection fee                                       -45

Rent Expense (understated)             -300

Adjusted cash account balance $112,933

b) The bank reconciliation statement above was prepared after adjusting the cash account with items that were recorded by the bank but not recorded by Cole Co. and other misstatements.  With the adjusted cash account balance, the bank reconciliation was then carried out with the items that were not recorded by the bank.  The resulting figure should agree with the bank statement balance.

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