Question

Question 1 2.17/7 View Policies Show Attempt History Current Attempt in Progress The following information pertains to Waterway Video Company. 1. Cash balance per bank, July 31, $7,863. 2. July bank service charge not recorded by the depositor $37. 3. Cash balance per books, July 31, $7,884. 4. Deposits in transit, July 31, $1,800. 5. Bank collected $1,200 note for Waterway in July, plus interest $45, less fee $29. The collection has not been recorded by Waterway, and no interest has been accrued. 6. Outstanding checks, July 31, $600.

Answer 1

Solution:

Waterway Video Company
Bank Reconciliation Statement
Jul'31
Particulars		Amount
Balance on bank statement		$7,863.00
Additions:
Outstanding Deposit	$1,800.00
Total Additions		$1,800.00
Deductions:
Outstanding checks	$600.00
Total Deductions		$600.00
Adjusted bank balance		$9,063.00
Balance in books		$7,884.00
Additions:
Note collection (Including interest and net of fee)	$1,216.00
Total Additions		$1,216.00
Deductions:
Service Charge	$37.00
Total Deductions		$37.00
Adjusted book balance		$9,063.00

Journal Entries - Waterway Video Company
Date	Particulars	Debit	Credit
Jul'31	Cash Dr	$1,216.00
	Expenses for collection Dr	$29.00
	To Note receivables		$1,200.00
	To Interest revenue		$45.00
	(To record note collection by bank)
Jul'31	Miscellaneous Expenses Dr	$37.00
	To Cash		$37.00
	(To record bank service charges)