Question

P7-5A Rodriguez Company maintains a checking account at the Imura Bank. At July 31, selected data from the ledger balance and the bank statement are shown below. Cash in Bank Per Books $17,600 81,400 Balance, July 1 July receipts Julv credits July disbursements July debits Balance, July 31 Per Bank $15,800 83,470 74,756 $24,514 77,150 $21,850 Analysis of the bank data reveals that the credits consist of $79,000 of July deposits and a credit memorandum of $4,470 for the collection of a $4,400 note plus interest revenue of $70. The July debits per bank consist of checks cleared $74,700 and a debit memorandum of S56 for printing additional company checks You also discover the following errors involving July checks: (1) A check for $230 to a creditor on account that cleared the bank in July was journalized and posted as $320. (2) A salary check to an employee for $255 was recorded by the bank for $155. The June 30 bank reconciliation contained only two reconciling items: deposits in transit $8,000 and outstanding checks of $6,200. Instructions (a) Prepare a bank reconciliation at July 31, 2015. (b) Journalize the adjusting entries to be made by Rodriguez Company. Assume that interest on the note has not been accrued

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Answer 1

Adjustment in Bank Statement:	Amount $
Before adj Bank balance	24514
Less: outstanding checks	-8460	6200+77150-74700-190
Add: deposits in transit	10400	8000+81400-79000
less: short debit	-100	255-155
Adjusted bal of Bank statement	26354
Adjustment in Books Balance:	Amount $
Before adjustment book bal.	21850
add: direct deposit to bank	4470	(4400+70)
less:bank charges	-56
add:excess debit	90	320-230
Adjusted bal of book balance	26354
Journal Entries in books :
1: Recording direct receipt by bank:
Debit	Cash	4470
Credit	Note receivable		4400
Credit	Interest revenue		70
2: Bank Charges;
Debit	Bank Charges	56
Credit	Cash		56
3: Excess debit in Cash:
Debit	Cash	90
Credit	Accounts Payable		90