Question

Kesler Co. deposits all receipts intact on the day received and makes all payments by cheque. On July 31, 2020, after all posting was completed, its Cash account showed a $10,909 debit balance. However, Kesler's July 31 bank statement showed only $10,031 on deposit in the bank on that day along with the following information a. Outstanding cheques, $2.744 b. Included with the July cancelled cheques returned by the bank was a $28 debit memo for bank services, c. Cheque 1919, returned with the cancelled cheques, was correctly drawn for $786 in payment of the utility bill and was paid by the bank on July 15. However, it had been recorded with a debit to Utilities Expense and a credit to Cash as though it were for $876. d. The July 31 cash receipts, $3,684, were placed in the bank's night depository after banking hours on that date and were unrecorded by the bank at the time the July bank statement was prepared Required: a. Prepare a bank reconciliation for Kesler Co. at July 31 Bank Statement Bank statement balance Add: KESLER CO. Bank Reconciliation July 31, 2020 Company's Books Book balance of cash Add: narut narut

Answer 1

Bank Reconciliation Statement
Balance as per bank statement	10031	Balance as per books	10909
Add:				Add:
Deposits in transit		3684	Error in recording utilities check	90
Sub total			13715	Sub total			10999
Less:				Less:
Outstanding checks		2744	Service charges		28
Adjusted balance as per bank	10971	Adjusted balance as per books	10,971
Adjusting entries
S.no.	Accounts title and xplanations	Debit $	Credit $
a.	Cash account		90
	Utilities expense			90
	(fr rectifying the check)
b.	Misc. expense		28
	Cash account			28
	(for service charges levied)
Profit		Under-stated
Assets		Under-stated
Liabilities		No effect
equity		Under-stated