Question

Brief Exercise 7-11 The following information relates to Wildhorse Limited's Cash account. The reconciled cash balance from June's bank reconciliation is $19,840. During the month of July, Wildhorse recorded cash receipts of $20,610 and cash payments of $23,140 in the general ledger Cash account. At July 31, Wildhorse Limited had an reconciled cash balance of $16,628. An examination of the company's July bank statement shows a balance of $19,568 on July 31; outstanding cheques $3,938; deposits in transit $1,758; EFT collections on account that were not yet recorded on the books $2,190; NSF cheque $1,250; NSF fee $70; and bank services charges $110. Prepare the necessary journal entries required on July 31 for Wildhorse. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit July 31 (To record EFT collections on account) (To record bank service charges) (To record NSF cheque and fee)

Answer 1

Bank Reconciliation is a process of identifying the difference that exist between the company's bank balance as per bank statement supplied by bank and cash balance as per company's accounting records. Wildhorse Limited Bank Reconciliation July 31 Amount | Amount Journal Entry Particulars Bank Balance July, 31 Add: Deposit in Transit $19,568 Credit Sr.No Date 1 July 31 Debit $2,190 $2,190 $1,758 $21,326 2 July 31 $110 Particulars Cash Accounts Receivable (To record eft collection on account) Bank Charges Cash (To Record bank service charges) Accounts Receivable Cash (To Record NSF check and fees) $3,938 Deduct: Outstanding Checks Total Deduction Adjusted Bank Balance $110 ($3,938) $17,388 3 July 31 $1,320 Cash $1,320 $16,628 Balance July, 31 Add: EFT Collection $2,190 $18,818 $70 $1,250 Deduct: NSF Fees NSF Check Bank Service Charge Total Deduction Adjusted Book Balance $110 ($1,430) $17,388