Question

On August 31, 2018, the general ledger of The Dean Acting Academy shows a balance for cash of $7,904. Cash receipts yet to be deposited into the checking account total $3,298, and checks written by the academy but not yet processed by the bank total $1,385. The company's balance of cash does not reflect a bank service fee of $31 and interest earned on the checking account of $42. These amounts are included in the balance of cash of $6,002 reported by the bank as of the end of August. Required: 1. Prepare a bank reconciliation to calculate the correct ending balance of cash on August 31, 2018. (Amounts to be deducted should be indicated with a minus sign.) 2. Record the necessary entry(ies) to adjust the balance for cash. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Required: 1. Prepare a bank reconciliation
The Dean Acting Academy
Bank Reconciliation Statement
On August 31, 2018
Balance as per Bank Statement	$6,002
Add: Deposits in trnasit	$3,298
	$9,300
Less: Cheques not presented	-$1,385
Adjusted Bank Balance	$7,915
Balance as per general Ledger	$7,904
Add: Interest earned	$42
	$7,946
Less: Bank Service charges	-$31
Adjusted Book Balance	$7,915

2. Record the necessary entry(ies) to adjust the balance for cash
JOURNAL
	Debit	Credit
Bank	$42
Interest revenue		$42
(Being Interest earned on checking account)
Miscelleneous Expense	$31
Bank		$31
(Being Bank service fee deducted by bank)