Fletcher and Associates had an unadjusted bank account ledger balance at 31 May of $750 Dr. The bank statement at the same date showed a balance of $1090 Cr. Bank service charges for the month were $20 and outstanding cheques totalled $400. The bank statement revealed that the bank had collected dividends for the firm of $120 and a deposit of $150 is not yet recorded on the statement. What is the corrected bank account ledger balance at 31 May?

Question

Quizplus · Accepted Answer

Starting balance: $750 Dr (+750)
Add: Deposits not on statement: $150 (+150)
Adjusted balance: $900 Dr (+900)

Starting balance: $1090 Cr (-1090)
Less: Outstanding cheques: $400 (+400)
Less: Bank service charges: $20 (+20)
Add: Dividends collected: $120 (-120)
Adjusted balance: $670 Cr (-670)

Adjusted bank balance: $900 Dr
Adjusted book balance: $670 Cr
Adjusted balance per bank statement: $230 Dr

The corrected bank account ledger balance at 31 May would be $850, calculated as follows:
$900 Dr (Adjusted bank balance) - $230 Dr (Adjusted balance per bank statement) = $670 Dr (Corrected bank account ledger balance)

Fletcher and Associates Had an Unadjusted Bank Account Ledger Balance