Xenon Inc.’s August 31 bank statement had an ending cash balance of $2,567. On August 31, Xenon’s general ledger showed a balance of $860. After comparing the general ledger to the bank statement the following items were noted: Outstanding checks: $2,250 Interest paid by the bank: $12 An NSF check from one of Xenon’s customers: $32 Deposits in transit: $1,900 A service fee charged by the bank: $8 A direct deposit from a customer: $1400 Check #345 was written at Acme Insurance; the amount of the check was $615. It was recorded in the general ledger for $600. Prepare a bank reconciliation for Xenon, Inc.

Bank Reconciliation Statement as at August 31

Balance at Bank as per Updated Cash Book          $2,281

Add Unpresented Cheques                                     $2,250

Less Lodgements not yet credited                         ($1,900)

Balance as per Bank Statement                               $2,631

Explanation:

Step 1 Bring the Cash Book Bank Balance up to date

Debit  :

Balance as at August 31,                                             $860

Interest                                                                            $12

NSF check                                                                      $32

Direct deposit                                                             $1400

Totals                                                                         $2,304

Credit :                                                                        

Service fee charged                                                        $8

Insurance understated                                                   $15

Updated Cash Book Balance (Balancing figure)    $2,281

Totals                                                                         $2,304

Step 2 Prepare the Bank Reconciliation Statement

Bank Reconciliation Statement as at August 31

Balance at Bank as per Updated Cash Book          $2,281

Add Unpresented Cheques                                     $2,250

Less Lodgements not yet credited                         ($1,900)

Balance as per Bank Statement                               $2,631

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