Question

Problem 8-04A a-b On July 31, 2020, Sunland Company had a cash balance per books of $6,002.00. The statement from Dakota State Bank on that date showed a balance of $7,730.20. A comparison of the bank statement with the Cash account revealed the following facts. 1. The bank service charge for July was $25. 2. The bank collected $1,770 for Keeds Company through electronic funds transfer. 3. The July 31 receipts of $1,270.00 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 $394 that cleared the bank in July was incorrectly entered as a cash payment on July 10 for $349. 5. Checks outstanding on July 31 totaled $1,876.20. 6. On July 31, the bank statement showed an NSF charge of $578 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 cash balance first. Round answers to 2 decimal places, e.g., 1,245.25) SUNLAND COMPANY Bank Reconciliation Prepare the necessary adjusting entries at July 31. Date Account Titles and Explanation Debit Credit July 31 (To record receipt of electronic funds transfer) July 31 (To record NSF check) July 31 (To correct error in recording check) July 31 (To record bank service charge) Click if you would like to Show Work for this question: Open Show Work

Answer 1

1) Bank reconciliation

July 31

Bank balance as per Statement		7730.20
Add: Deposit in transit		1270
		9000.20
Less: Outstanding checks		-1876.20
Adjusted balance		7124
Balance as per Books		6002
Add: Electronic fund transfer		1770
		7772
Less:
NSF check	-578
bank Charges	-25
Error in check	-45
		-648
Adjusted balance		7124

Adjusting entry

Date	General Journal	Debit	Credit
July 31	Cash	1770
	Account receivable		1770
July 31	Account receivable	578
	Cash		578
July 31	Account payable	45
	Cash		45
July 31	Bank Charges	25
	Cash		25