Question

The following information pertains to Pharoah Company

 1. Cash balance per bank, July 31, $7,830

 2. July bank service charge not recorded by the depositor $45.

 3. Cash balance per books, July 31, $7.920.

 4. Deposits in transit, July 31. $3,195.

 5. $1,800 collected for Pharoah Company in July by the bank through electronic funds transfer. The accounts receivable collection has not been recorded by Pharoah Company

 6. Outstanding checks, July 31. $1,350. 

Prepare a bank reconciliation at July 31, 2022. (List items that increase balance as per bank & books first.)

Journalize the adjusting entries at July 31 on the books of Pharoah Company. 

Answer 1

Answer (a)

PHAROAH COMPANY
Bank Reconciliation
31-Jul-22
Cash Balance per bank statement	$          7,830
Add: Deposit in transit	$          3,195
	$        11,025
Less: Outstanding checks	$          1,350
Adjusted cash balance per bank	$          9,675
Cash balance per books	$          7,920
Add: Electronic fund transfer received	$          1,800
	$          9,720
less; Bank service charge	$                45
Adjusted cash balance per books	$          9,675

Answer (b)

Date	Account	Debit	Credit
July 31	Cash	$          1,800
	Accounts Receivable		1800
	(To record electronic fund transfer received by bank)
July 31	Bank service charge	$           45
	Cash		$          45
	(To record bank service charges )