Question

On July 31, 2012, Fraiser Company had a cash balance per books of $6,140. The statement from Nashota State Bank on that date showed a balance of $7,690.80. A com-parison 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 a note receivable of $1,500 for Fraiser Company on July 15, plus $30 of interest. The bank made a $10 charge for the collection. Fraiser has notac- crued any interest on the note.
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 July31.
4. CompanycheckNo.2480issuedtoT.Crain,acreditor,for$384thatclearedthebank in July was incorrectly entered in the cash payments journal 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 K. Fonner, 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

A. Cash balance per books on 31 Jul'12 $6,140
Adjustments :
1. The bank service charge for July -$25
2. Int on Note Rxable Jul 15 +$30
4. Error in Cash payment journal(348-384) -$36
6. NSF check -$575
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Adjusted/corrected balance as per books $5534

B. Balance per Bank Statement on Jul 31, 2012 $7,690.80
Adjustments:
3. Deposit in transit +$1,193.30
5. Outstanding check -$1,860.10
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Adjusted/Corrected Balance per Bank $6,943

Answer 2

Adjusted/Corrected Balance per Bank $7,024

Adjusted/corrected balance as per books $7,024