Question

Problem 8-4A Preparing a bank reconciliation and recording adjustments@p3 The following information is available to reconcile Branch Company's book balance of cash with its bank statement cash balance as of July 31. a. On July 31, the company's Cash account has a $27,497 debit balance, but its July bank statement shows a $27,233 cash balance. b. Check No. 3031 for $1,482, Check No. 3065 for $382, and Check No. 3069 for $2,281 are outstanding checks as of July 31. c. Check No. 3056 for July rent expense was correctly written and drawn for $1,270 but was erroneously entered in the accounting records as $1,250. d. The July bank statement shows the bank collected $7,955 cash on a note for Branch. Branch had not recorded this event before receiving the statement. e. The bank statement shows an $805 NSF check. The check had been received from a customer, Evan Shaw. Branch has not yet recorded this check as NSF. f. The July statement shows a $25 bank service charge. It has not yet been recorded in miscellaneous expenses because no previous notification had been received. 8. Branch's July 31 daily cash receipts of $11,514 were placed in the bank's night depository on that date but do not appear on the July 31 bank statement. Required 1. Prepare the bank reconciliation for this company as of July 31. 2. Prepare the journal entries necessary to make the company's book balance of cash equal to the reconciled cash balance as of July 31. Check (1) Reconciled balance, $34,602; (2) Cr. Notes Receivable, $8,000

Answer 1

$ $ 27,497 Bank statement balance Add: Deposit of July 31 $ 11,514 $ 7,955 $ $ BRANCH COMPANY Bank Reconciliation July 31 27,233 Book balance Add: Proceeds of Note 11,514 38,747 Deduct: NSF check including fee Service charge Error (Check 3056) 4,145 34,602 Adjusted bank balance $ $ 7,955 35,452 $ Deduct: Check No. 3031 Check No. 3065 Check No. 3069 1,482 382 2,281 son $ $ $ 850 34,602 Adjusted bank balance $ Debit Credit $ 20 $ 20 $ 7,955 General Journal Rent Expense Cash Cash Notes Recevable Accounts Receivable-E. Shaw Cash Miscellaneous Expenses Cash 7,955 805