Question

 C. Bank Reconciliation

 On July 31, 2020, Keeds Company had a cash balance per books of $6,140. The statement from Dakota State Bank on that date showed a balance of $7,690.80. A comparison of the bank statement with the

 Cash account revealed the following facts.

 1. The bank service charge for July was $25.

 2. The bank collected $1,520 for Keeds Company through electronic funds transfer.

 3. The July 31 receipts of $1,193.30 were not included in the bank deposits for July. These receipts were deposited by the company in a night deposit vault on July 31.

 4. Company check No. 2480 issued to L. Taylor, a creditor, for $384 that cleared the bank in July was

 incorrectly entered as a cash payment on July 10 for $348.

 5. Checks outstanding on July 31 totaled $1,860.10.

 6. On July 31, the bank statement showed an NSF charge of $575 for a check received by the company from W. Krueger, a customer, on account.

 Instructions

 a. Prepare the bank reconciliation as of July 31.

 b. Prepare the necessary adjusting entries at July 31.

Answer 1

Answer a.

Keeds Company.

Bank Reconciliation

July 31, 2020

Cash balance per bank statement		$7,690.80
Add: Deposits in transit		1,193.30
		8,884.10
Less: Outstanding checks		1,860.10
Adjusted cash balance per bank		$7,024
Cash balance per books		$6,140
Add: Electronic funds transfer receive		1,520
		7,660
Less:
NSF check	575
Bank service charge	25
Error in recording check No. 2480 (384 - 348)	36
		636
Adjusted cash balance per books		$7,024

Answer b.

Journal entries.

Date	General Journal	Debit	Credit
July 31, 2020	Cash	1,520
	Accounts receivable		1,520
	(To record EFT received)
July 31, 2020	Accounts receivable	575
	Cash		575
	(To record NSF check)
July 31, 2020	Bank charge expenses	25
	Cash		25
	(To record bank service charge)
July 31, 2020	Accounts payable	36
	Cash		36
	(To record rectification of error)