The bank statement for the checking account of Management Systems Inc. (MSI) showed a December 31, 2014, balance of $14176.11.
Information that might be useful in preparing a bank reconciliation is as follows:
a. Outstanding checks were $1338.22.
b. The December 31, 2014, cash receipts of $558.26 were not deposited in the bank until January 2, 2015.
c. One check written in payment of rent for $250 was correctly recorded by the bank but was recorded by MSI as a $277 disbursement.
d. In accordance with prior authorization, the bank withdrew $450 directly from the checking account as payment on a mortgage note payable. The interest portion of that payment was $350. MSI has made no entry to record the automatic payment.
e. Bank service charges of $15 were listed on the bank statement.
f. A deposit of $891 was recorded by the bank on December 13, but it did not belong to MSI. The deposit should have been made to the checking account of MIS, Inc.
g. The bank statement included a charge of $88 for an NSF check. One of MSI's customers paid with a check that was returned for insufficient funds. The check was returned with the bank statement and the company will seek payment from the customer.
Prepare a bank reconciliation for the MSI checking account at December 31, 2014 using the following format. (For items to subtract, make sure to use a (-) sign; otherwise, the items will be considered to be an addition.)
You will have to compute the balance as per books and determine the amount of adjustment needed for MSI's book balance.