Prepare a Bank Reconciliation for Show Me, Inc

question 43

Essay

Prepare a bank reconciliation for Show Me, Inc., as of June 30 from the following information:
(a.) The June 30 balance shown on the bank statement is $5,796.(b.) Outstanding checks at June 30 totaled $330.(c.) A deposit of $424 made on June 30 was not included in the balance shown on the bank statement.(d.) The bank statement contained an adjustment of $410 for a note receivable collected by the bank on behalf of Show Me, Inc. ($382 principal and $28 interest).(e.) A bank charge of $34 was made to the account during June. Although the company was expecting a charge, the amount was not known until the bank statement arrived.(f.) The bank erroneously charged a $340 check of Shirt, Inc., against the Show Me, Inc., bank account.(g.) The June 30 balance in the general ledger Cash account, before reconciliation, is $6,026.(h.) The bank statement included a notice that a customer's check for $172 that had been deposited on June 14 had been returned NSF.Required:
(1.) Prepare the bank reconciliation for Show Me, Inc., as of June 30.(2.) Prepare the appropriate adjusting entry(ies) or show the reconciling items in a horizontal model, for Show Me, Inc., related to the bank reconciliation.

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Definitions:

Total Reserves

The sum of all deposits, including cash, bank deposits, and investable assets, held by a financial institution or country.

Required Reserves

The minimum amount of reserves a bank must hold, as mandated by regulatory bodies, based on a percentage of the bank's deposit liabilities.

Money Supply

The total quantity of money available in the economy at a given time, including currency, deposits, and other liquid assets.

Required Reserve Ratio

The proportion of deposits that banks are required to hold in reserve and not lend out.