The following data were accumulated for use in reconciling the bank account of Wolfpack Bread Inc. for August 20Y9: Cash balance according to the company's records at August 31, $34,437.
Cash balance according to the bank statement at August 31, $33,580.
Checks outstanding, $13,340.
Deposit in transit, not recorded by bank, $14,260.
A check for $276 issued in payment of an account to a supplier was erroneously recorded by Wolfpack Bread Inc. as $762.
Bank debit memo for service charges, $144.
Record the effects on the accounts and financial statements of the company based upon the information above.
If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank.
Enter account decreases and cash outflows as negative amounts.
Increase in Cash Balance Sheet Assets Liabilities + Stockholders' Equity Aug. 31.
Statement of Cash Flows Income Statement < Decrease in Cash Balance Sheet Assets Liabilities + Stockholders' Equity Aug. 31.
Statement of Cash Flows Income Statement

Adjusted bank account balance = Adjusted cash book balance = $34,500

Explanation:

Note: The correct requirement of this question is actually as follows:

Prepare a bank reconciliation.

It is not the ones erroneously stated in the question.

The bank reconciliation can now be prepared as follows:

Wolfpack Bread Inc.

Bank Reconciliation

August 31, 20Y9

Statement of Adjusted Bank Account Balance  

Details                                                                       Amount ($)  

Cash balance according to bank statement              33,580

Add:

Deposit in transit, not recorded by bank                    14,260

Less:

Checks outstanding                                                     (13,340)  

Adjusted bank account balance                                34,500  

Statement of Adjusted Cash Book Balance  

Details                                                                       Amount ($)   

Cash balance according to Wolfpack                         34,437

Add:

Check error ($762 - $276)                                              486

Less:

Bank service charges                                                     (144)

Other reconciling items (w.1)                                         (279)  

Adjusted cash book balance                                      34,500  

Working:

w.1: Other reconciling items = Cash balance according to Wolfpack + Check error ($762 - $276) - Bank service charges - Adjusted bank account balance = $34,437 + 486 - 144 - $34,500 = $279

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