Question

On July 31, 2022, Pharoah Company had a cash balance per books of $6,320.00. The statement from Dakota State Bank on that date showed a balance of $7.870.80. A comparison of the bank statement with the Cash account revealed the following facts.

 1. The bank service charge for July was $21.00.

 2. The bank collected $1,700.00 from a customer for Pharoah Company through electronic funds transfer.

 3. The July 31 receipts of $1,377.30 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 L. Taylor, a creditor, for $374.00 that cleared the bank in July was incorrectly entered in the cash payments journal on July 10 for $347.00.

 5. Checks outstanding on July 31 totaled $2,031.10.

 6. On July 31, the bank statement showed an NSF charge of $755.00 for a check received by the company from W. Krueger, a customer, on account.

Prepare the bank reconciliation as of July 31. (List items that increase balance as per bank & books first.) 

Answer 1

Journal entry

Date	General Journal	Debit	Credit
July 31	Cash	1700
	Account receivable		1700
	(To record electronic fund transfer received)
July 31	Account receivable	755
	Cash		755
	(To record NSF Check)
July 31	Account payable	27
	Cash		27
	(To correct error in recording check)
July 31	Bank Service charge	21
	Cash		21
	(To record bank service charge)