Question

An examination of the cash activities during the year shows the following.  
     

GREAT ADVENTURES Cash Account Records July 1, 2018, to December 31, 2018
Deposits				Checks/Debit Cards
Date	Desc.	Amount		Date	No.	Desc.	Amount
7/1	Stock sale	$	30,000	7/1	101	Insurance	$	3,960
7/15	Clinic receipts		1,800	7/2	102	Legal fees		1,150
7/22	Clinic receipts		2,760	7/7	DC	Advertising		230
7/30	Clinic receipts		3,600	7/8	103	Bikes		11,300
8/1	Borrowing		23,000	7/24	DC	Advertising		630
8/10	Clinic receipts		5,100	8/4	104	Kayaks		18,200
8/17	Clinic receipts		11,900	8/24	DC	Office supplies		1,730
9/21	Clinic receipts		12,500	9/1	105	Rent		1,560
10/17	Clinic receipts		17,200	12/8	106	Race permit		1,130
12/15	Race receipts		30,000	12/16	107	Salary		2,000
				12/31	108	Dividend		3,000
				12/31	109	Dividend		3,000
		$	137,860				$	47,890

  

Summary of Transactions

Beginning Cash Balance July 1, 2018	+	Deposits	?	Checks	=	Ending Cash Balance December 31, 2018
$0		$137,860		$47,890		$89,970

   

Suzie has not reconciled the company’s cash balance with that of the bank since the company was started. She asks Summit Bank to provide her with a six-month bank statement. To save time, Suzie makes deposits at the bank only on the first day of each month.
   

SUMMIT BANK                             Leading You to the Top									Member FDIC
Account Holder:			Great Adventures, Inc.				Account Number:     Statement Date:		1124537774 Dec. 31, 2018
Account Summary
Beginning Balance			Deposits and Credits				Withdraws and Debits		Ending Balance
July 1, 2018			No             Total				No         Total		December 31, 2018
$0			8		$108,160		11	$39,990	$68,170
Account Details
Deposits and Credits				Withdraws and Debits					Daily Balance
Date	Amount		Desc.	Date	No.	Amount		Desc.	Date	Amount
7/1	$	30,000	DEP	7/1	101	$	3,960	CHK	7/1	$	26,040
8/1		8,160	DEP	7/7	102		1,150	CHK	7/7		24,660
8/1		23,000	DEP	7/7			230	DC	7/14		13,360
9/1		17,000	DEP	7/14	103		11,300	CHK	7/24		12,730
9/30		100	INT	7/24			630	DC	8/1		43,890
10/1		12,500	DEP	8/9	104		18,200	CHK	8/9		25,690
11/1		17,200	DEP	8/24			1,730	DC	8/24		23,960
12/31		200	INT	9/2	105		1,560	CHK	9/1		40,960
				9/30			50	SF	9/2		39,400
				12/10	106		1,130	CHK	9/30		39,450
				12/31			50	SF	10/1		51,950
									11/1		69,150
									12/10		68,020
	$	108,160				$	39,990		12/31	$	68,170

  

Desc.	DEP Customer deposit	INT Interest earned	SF Service fees
	CHK Customer check	DC Debit card

  
After comparing the two balances, Suzie has some concern because the bank’s balance of $68,170 is substantially less than the company’s balance of $89,970.
   
2-a. Prepare Great Adventures’ bank reconciliation for the six-month period ended December 31, 2018. (Amounts to be deducted should be indicated with a minus sign. Total entries to the same account together when entering in the bank reconciliation.)
   

   
2-b. Record any necessary entries to adjust cash. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Total entries to the same account together when entering in the journal entry carousel.)
       

Answer 1

2-a.

GREAT ADVENTURES
Bank Reconciliation
for the period from July1 to Dec.31 , 2018
Balance as per bank	68170	Balance as per cash book	89970
Additions:		Additions:
Deposit in transit	30000	Interest credited 9/30	100
Service Fee 9/2 and 10/1	100	Interest credited 12/31	200
		Check #107	2000
		Check #108	3000
		Check #109	3000
Total Additions	30100	Total Additions	8300
Deductions:		Deductions:
Interest credited 9/30	100	Deposit in transit	30000
Interest credited 12/31	200	Service Fee 9/2 and 10/1	100
Check #107	2000
Check #108	3000
Check #109	3000
Total Deductions	8300	Total Deductions	30100
Balance as per cash book	89970	Balance as per bank	68170

2-b.

Date	Account Title	Debit	Credit
Dec.31	Bank charges	100
	Cash		100
	(Service fee charged by bank)
Dec.31	Cash	300
	Interest Revenue		300
	(Interest credited by bank)

The bank reconciliation after recording the above journal entries will be as follows:

GREAT ADVENTURES
Bank Reconciliation
for the period from July1 to Dec.31 , 2018
Balance as per bank	68170	Balance as per cash book	90170
Additions:		Additions:
Deposit in transit	30000	Check #107	2000
		Check #108	3000
		Check #109	3000
Total Additions	30000	Total Additions	8000
Deductions:		Deductions:
Check #107	2000	Deposit in transit	30000
Check #108	3000
Check #109	3000
Total Deductions	8000	Total Deductions	30000
Balance as per cash book	90170	Balance as per bank	68170