Question

correction or any errors counts Receivable.) fertilizer and herbi necon P75B Grossfeld Com llowing balance Grossfeld Comany of Omahu. Nebraska, provides liquid fertilizer and he de la regional farm On July 31, 2012, the company cash account per il gen ledger showed a balance of $5,876,70. ne bank statement from The State Bank on that date showed the following bal TRI-STATE BANK Daily Balance Checks and Debits Deposits and Credits 7-31 7,043.80 XXX XXX A comparison of the details on the bank statement with the details in the Cash accou revealed the following facts. 1. The bank service charge for July was $32. 2. The bank collected a note receivable of $900 for Grossfeld Company on July 15 ml 548 of interest. The bank made an $18 charge for the collection, Grossfeld has to accrued any interest on the note. 3. The July 31 receipts of $1,339 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 S. Tully, a creditor, for $471 that cleared the bank in July was incorrectly entered in the cash payments journal on July 10 for $417 5. Checks outstanding on July 31 totaled $2,480.10. 6. On July 31, the bank statement showed an NSF charge of $818 for a check received by the company from L. Weare, a customer, on account. Instructions (a) Prepare the bank reconciliation as of July 31, 2012. (b) Prepare the necessary adjusting entries at July 31, 2012. P7-6B Pincus Co. expects to have a cash halance of an

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Answer 1

Grossfeld Company Bank Reconciliation Statement 31 July 2012 4 Cash Balance per Bank statement 5 Add: Deposits in transit 6 $ 7,043.80 $ 1,339.00 $ 8,382.80 $ 2,480.10 $ 5,902.70 $ 5,876.70 $ 930.00 $ 6,806.70 7 Less: Outstanding checks 8 Adjusted cash balance per Bank 9 10 Cash Balance per Books 11 Add: Collection of Note receivable 12 13 Less: 14 Bank service charge 15 Error in recording check no:2480 16 NSF check 17 18 Adjusted Cash Balance per Books $ 32 $ 54 $ 818 $ 904.00 $ 5,902.70

Grossfeld Company 2 Bank Reconciliation Statement 3 41121 4 Cash Balance per Bank statement 7043.8 5 Add: Deposits in transit 1339 =+C4+C5 7 Less: Outstanding checks 2480.1 8 Adjusted cash balance per Bank =+C6-C7 9 10 Cash Balance per Books 5876.7 11 Add: Collection of Note receivable =900+48-18 12 =+C10+C11 13 Less: 14 Bank service charge 15 Error in recording check no:2480 16 NSF check 818 =+B14+B15+B16 18 Adjusted Cash Balance per Books =+C12-C17 54 17

Date Account Titles and Explanation Debit Credit Jul-31 Cash $ 930 Bank service charge $ 18 Notes receivable $ 900 Interest revenue (To record the collection of Notes receivable) 48 818 Jul-31 Accounts receivable Cash (To record NSF check) 818 $ 54 Jul-31 Accounts payable Cash (Tro record error in recording check) $ 32 Jul-31 Bank service charge Cash (To record bank service charge) 32

Note: Miscellaneous expense account can also be debited instead of Bank service charges.