Question

Required information

Problem 6-4A Preparing a bank reconciliation and recording adjustments LO P3

[The following information applies to the questions displayed below.]

The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31.

  

1. On July 31, the company’s Cash account has a $24,912 debit balance, but its July bank statement shows a $26,925 cash balance.
2. Check No. 3031 for $1,370, Check No. 3065 for $461, and Check No. 3069 for $2,138 are outstanding checks as of July 31.
3. Check No. 3056 for July rent expense was correctly written and drawn for $1,270 but was erroneously entered in the accounting records as $1,260.
4. The July bank statement shows the bank collected $6,000 cash on a note for Branch. Branch had not recorded this event before receiving the statement.
5. 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.
6. The July statement shows a $9 bank service charge. It has not yet been recorded in miscellaneous expenses because no previous notification had been received.
7. Branch’s July 31 daily cash receipts of $7,132 were placed in the bank’s night depository on that date but do not appear on the July 31 bank statement.

Problem 6-4A Part 1

Required:

1. Prepare the bank reconciliation for this company as of July 31.

Required information Problem 6-4A Preparing a bank reconciliation and recording adjustments LO P3 The following information applies to the questions displayed below.] 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 $24,912 debit balance, but its July bank statement shows a $26,925 cash balance. b. Check No. 3031 for $1,370, Check No. 3065 for $461, and Check No. 3069 for $2,138 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 $1,260. d. The July bank statement shows the bank collected $6,000 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 $9 bank service charge. It has not yet been recorded in miscellaneous expenses because no previous notification had been received. g. Branch's July 31 daily cash receipts of $7,132 were placed in the bank's night depository on that date but do not appear on the July 31 bank statement. Problem 6-4A Part 1 Required: 1. Prepare the bank reconciliation for this company as of July 31. BRANCH COMPANY Bank Reconciliation July 31 Book balance Add: Bank statement balance Add: | Deduct: Deduct: Adjusted bank balance Adjusted book balance

• Record the adjusting entry required, if any, related to the outstanding checks
• Record the adjusting entry required, if any, related to Check No. 3056.
• Record the adjusting entry required, if any, for the collection of the note by bank for Branch.
• Record the adjusting entry required, if any, related to the NSF check.
• Record the adjusting entry required, if any, related to bank service charges.
• Record the adjusting entry required, if any, related to the July 31 deposit.

Answer 1

solution: Branch company Bank reconciliation July 31. 26,925 Book balance Add: 7,132 note collected by bank 24,912 bank statement balance Add: Deposit in transit 6,000 Deduct: outstanding checks: 3031 3065 3069 Deduct : error in check no 3056=1270-1260 NSF check Bank service charges 1,370 461 2,138 805 9. 824 3,969 Adjusted bank balance 30,088 Adjusted book balance 30,088

debit credit Trans. General Journal a No entry b No entry c 10 Rent expense cash d 6,000 cash Note receivable 6.000 805 account receivable - E shaw cash 805 miscellaneous expense cash g No entry