Question

A company general ledger shows a checking account balance of $22,820 on July 31, Year 1. The July cash receipts of $1,735, included in the general ledger balance, are placed in the night depository at the bank on July 31 and processed by the bank on August 1. The bank statement dated July 31 shows bank service fees of $40. The bank processes all checks written by the company by July 31 and lists them on the bank statement, except for one check totaling $1,310. The bank statement shows a balance of $22,355 on July 31.

Required:

1. Prepare a bank reconciliation to calculate the correct ending balance of cash on July 31, Year 1. (Amounts to be deducted should be indicated with a minus sign.)

Bank Reconciliation July 31, Year 1 Company's Cash Balance Per General Ledger Bank's Cash Balance Per Bank Statement Bank Balance per Reconciliation Company Balance per Reconciliation

2. Record the necessary entry(ies) to adjust the balance for cash. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Bank's Cash Balance Per bank statement Deposits outstanding Checks outstanding Bank balance per Reconciliation Bank Reconciliation July 31,Year 1 Company's Cash Balance $22,355 Per general ledger $ 22,820 $ 1,735 Service fees $ (40) $(1,310) $ 22,780 Company balance per Reconciliation $ 22,780 Credit 21 Date Genearl Journal July. 31 No Journal entry required Debit $ - $ 40 July. 31 Service Fees Expenses Cash (Being Decrease in cash transactions recorded) 40