Question

Topic #6 Problem On June 30, Tan Company's bank reconciliation showed a $400 deposit in transit and outstanding checks #1151, $440: #1153, S620: and #1155, 5790. During the month of July, Tan Company recorded the following cash receipt and cash payment transactions in the general ledger: Beg. Bal. Receipts: 776 7/13 7/20 7/27 7/31 End. Bal. CASH 2,045 Payments: 550 390 840 610 750 840 960 115 310 260 3.240 Ck #1160 Ck #1161 Ck #1162 Ck #1163 Ck#1164 At the end of July, the following bank statement was received: Rainbow BANK 9999 Cloudy Skies Way Depositor Name: Tan Company For Period: July 1 through July 31 Account Number: 999-9999991 Monthly Summary: Beginning Balance, July 1 $ 3,495 Total Deposits and Other Credits 4,590 Total Checks Paid and Other Debits (2,270) Ending Balance, July 31 S 5,815 Deposits Received: Other Credits: Date Amount Date Description Amount Jul 1 $ 400 July 15 Collection of a $1,000 note receivable plus $120 7 550 interest revenue less S30 bank transaction 14 840 $ 1,090 21 750 28 960 Checks Paid: Other Debits: Check No. Amount Date Description Amount 1151 $ 440 July 27 Non-Sufficient Funds check from depositor 1153 620 customer, C. Purple S 210 1160 31 Monthly Service Charge on Account 15 1162 480 fee 390 163 115

Answer 1

A) Bank Reconciliation as on July 31 :
	Amount $	Calculations
Closing Balance as per Cash Book	3240
Add:excess debit for Check 1162	360	840-480
Add:Note rece direct collec.	1000
Add:Interest collected	120	(120-30)
Less:Bank charges	-30
Less:CNF	-210
Less:Service charges	-15
Adjusted Closing Balance as per Cash Book	4465
Adj. Balance as per Bank Statement:
	Amount $
Closing Balance as per Bank Statement	5815
Add: Deposit in transit	310
Less:Checks outstanding:
#1155	-790
#1161	-610
#1164	-260
Adjusted Closing Balance as per bank Statement	4465

B)Journal Entries in Cash Book:
Date	Accounts Title	Debit $	Credit $
31-Jul	Cash	360
	Accounts Payable		360
	(being excess debit reversed for check 1162)
31-Jul	Cash	1120
	Note receivable		1000
	Interest revenue		120
	(being note principle and interest received by bank)
31-Jul	Bank Charges	30
	Bank Charges	15
	Cash		45
	(being bank charges booked)
31-Jul	Accounts Receivable	210
	Cash		210
	(being CNF check reversed)