Bank Reconciliation for Keeds Company on July 31, 2017

Discrepancies in Bank Reconciliation:

Several discrepancies were found in the bank reconciliation for Keeds Company on July 31, 2017. These included:

• The bank service charge for July was $25.00.
• A bank collected $1,520.00 for Keeds Company through electronic funds transfer.
• Receipts of $1,193.30 deposited by the company in a night deposit vault on July 31 were not included in the bank deposits for July.
• An error in recording check No. 2480 issued to a creditor for $384.00 was incorrectly entered in the cash payments journal for $348.00.
• Outstanding checks on July 31 totaled $1,860.10.
• The bank statement showed a NSF charge of $575.00 for a check received from a customer on account.

Explanation:

Bank Service Charges: The bank deducted $25.00 as a service charge for the month of July.

Electronic Funds Transfer: A total of $1,520.00 was collected by the bank on behalf of Keeds Company through an electronic funds transfer.

Missing Deposits: The receipts of $1,193.30, deposited by the company in a night deposit vault on July 31, were not accounted for in the bank deposits for the month.

Error in Recording Check: Check No. 2480 was issued for $384.00 but incorrectly recorded as $348.00 in the cash payments journal.

Outstanding Checks: Checks totaling $1,860.10 were still in circulation and had not cleared the bank as of July 31.

NSF Charge: The bank imposed a non-sufficient funds charge of $575.00 for a check from a customer received by Keeds Company.

Rectifying the Discrepancies:

To rectify the discrepancies in the bank reconciliation for Keeds Company on July 31, 2017, the following steps can be taken:

1. Adjust the balance as per bank statement by considering the electronic funds transfer, outstanding checks, missing deposits, bank service charges, and NSF check charges.
2. Correct the error in recording check No. 2480 issued to a creditor by adjusting the amount in the cash payments journal.
3. Update the cash balance per books by accounting for the adjustments made based on the bank reconciliation.
4. Prepare necessary adjusting entries to reflect the changes in accounts such as bank charges, outstanding checks, and fund transfers.

Final Notes:

By addressing and rectifying the discrepancies found in the bank reconciliation, Keeds Company can ensure that its financial records align with the bank statement. This process helps in accurately reflecting the company's financial position and transactions for the month of July 2017.