Question

I couldn't add on the photo the missing part of Account titles and Explanation

Solish Brothers Inc.'s bank statement from Main Street Bank at August 31, 2022, gives the following information, $50 Balance, August 1 August deposits Checks cleared in August Bank credit memorandum: Interest earned $18,540 Bank debit memorandum 71,140 Safety deposit box foe 68,653 Service charge Balance, August 31 20,972 70 A summary of the Cash account in the ledger for August shows the following: balance, August 1, $18,840; receipts $74,140; disbursements $73,545; and balance, August 31, $19,435. Analysis reveals that the only reconciling items on the July 31 bank reconciliation were a deposit in transit for $4,825 and outstanding checks of $4,525. In addition, you determine that there was an error involving a company check drawn in August: A check for $400 to a creditor on account that cleared the bank in August was journalized and posted for $40. Determine deposits in transit. Deposits in transit Determine outstanding checks. (Hint: You need to correct disbursements for the check error) Outstanding checks Prepare a bank reconciliation at August 31. (List Items that increase balance as per bank & books first.) SPLISH BROTHERS INC. Bank Reconellation Screenshot Joumalize the adjusting entries to be made by Splish Brothers Inc. at August 31. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Answer 1

SOLUTION

1.

Deposits in transit as per July reconciliation	4,825
Add: August deposits as per ledger	74,140
Less: August deposits as per statement	(71,140)
Deposit in transit as per August reconciliation	7,825

2.

Outstanding checks as per July reconciliation	4,525
Add: August disbursements per ledger	73,545
Add: Correction to august disbursement per ledger (400-40)	360
Less: Checks cleared on August statement	(68,653)
Outstanding checks as per August reconciliation	9,777

3. Bank reconciliation statement

Cash balance as per bank statement	20,972
Add: Deposits in transit	7,825
	28,797
Less: Outstanding checks	(9,777)
Adjusted cash balance as per bank	19,020
Cash balance as per books	19,435
Add: Interest earned	70
	19,505
Less: Service charge	(75)
Error in recording checks (400-40)	(360)
Safety deposits box rent	(50)
Adjusted cash balance as per books	19,020

4. Adjusting entries-

Date	Accounts titles and Explanation	Debit ($)	Credit ($)
August 31	Cash	70
	Interest revenue		70
	(To record interest earned)
August 31	Accounts payable	360
	Cash		360
	(To correct error in recording check)
August 31	Bank locker fees	50
	Cash		50
	(To record safety deposit box fee)
August 31	Bank service charges	75
	Cash		75
	(To record service charge)