A comparison of the bank statement with the cash account


On July 31, 2012, Caton Company had a cash balance per books of $20,809. The statement from Jackson State Bank on that date showed a balance of $17,695. A comparison of the bank statement with the cash account revealed the following facts.

1.The bank service charge for July was $125.

2.The bank collected a note receivable of $2,500 for Fenton Company on July 15, plus $500 of interest. The bank made a $50 charge for the collection. Caton has not accrued any interest on the note.

3.The July 31 receipts of $7,193 were not included in the bank deposits for July. These receipts were deposited by the company in a night deposit vault on July 31.

4.Company check No. 2480 issued to H. Coby, a creditor, for $3384 that cleared the bank in July was incorrectly entered in the cash payments journal on July 10 for $3348.

5.Checks outstanding on July 31 totaled $1,980.

6.On July 31 the bank statement showed an NSF charge of $690 for a check received by the company from a customer, on account.

(a)Complete the bank reconciliation as of July 31.

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Accounting Basics: A comparison of the bank statement with the cash account
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