Question

Problem 3

1. Using the following information, prepare a bank reconciliation for Dunbar Associates for August 31, 2017:

• The bank statement balance is $4,690.
• The cash account balance is $5,080.
• Outstanding checks amounted to $715.
• Deposits in transit are $1,020.
• The bank service charge is $40.
• A check for $72 for supplies was recorded as $27 in the ledger.

2. Journalize the entries to record the following:

• Aug 1. Established a petty cash fund of $500
• Aug 30. The amount of cash in the petty cash fund is now $190. The fund is replenished based on the following receipts: office supplies, $220; postage, $80. Record any discrepancy in the cash short and over account.

Required

Prepare bank reconciliation and journalize the entries.

Answer 1

1) Bank Reconcilation statement

Balance as per bank 4690 Balance as per book 5080 Less:outstanding checks -715 Less:bank service charge - 40 Add:deposit in transit 1020 less:error in recording (72 -27) - 45 Adjusted balance 4995 adjusted balance 4995

2) Journal Entries :

Date	Particular	Debit	Credit
1.	Petty Cash Fund A/C Dr	500
	To Cash a/c		500
2.	Office Supplies A/C Dr	220
	Postage a/c Dr	80
	Cash short Over a/c Dr	10
	To Cash a/c		310