Question

blem 6-4A errig a bank nciliation and ding adjustments 1 The following information is available to reconcile Branch Company's book balance of cash with its bank statement cash balance as of July 31. a. On July 31, the company's Cash account has a $27.497 debit balance, but its July bank statement shows a $27,233 cash balance. b. Check No. 3031 for $1,482, Check No. 3065 for $382, and Check No. 3069 for $2.281 are outstanding checks as of July 31. c. Check No. 3056 for July rent expense was correctly written and drawn for $1,270 but was erroneously entered in the accounting records as $1,250. d. The July bank statement shows the bank collected $7,955 cash on a note for Branch. Branch had not recorded this event before receiving the statement. e. The bank statement shows an 5805 NSF check. The check had been received from a customer. Evan Shaw. Branch has not yet recorded this check as NSF. f. The July statement shows a $25 bank service charge. It has not yet been recorded in miscellaneous expenses because no previous notification had been received. g. Branch's July 31 daily cash receipts of $11,514 were placed in the bank's night depository on that date but do not appear on the July 31 bank statement. (1) Reconciled $34,602:2) eceivable, $8,000 Required 1. Prepare the bank reconciliation for this company as of July 31. 2. Prepare the journal entries necessary to make the company's book balance of cash equal to the recon- ciled cash balance as of July 31.

Answer 1

1)

Branch Company
Bank Reconciliation Statement
July. 31
Balance as per bank statement	$27,233	Balance as per Cash book	$27,497
Add:		Add:
Deposits in Transit	$11,514	Note Receivable	$7,955
Less:		Less:
Outstanding Checks:		Error made by company ($1,270 - $1,250)	($20)
3031	($1,482)	NSF Check	($805)
3065	($382)	Service Charges	($25)
3069	($2,281)
Adjusted Bank Balance	$34,602	Adjusted Cash Balance	$34,602

2)

Journal Entries:

Date	Accounts Titles and Explanations	Debit	Credit
Jul. 31	Cash	$7,955
	Notes Receivable		$7,955
	(To record the collection of notes receivable)
Jul. 31	Rent Expense	$20
	Cash		$20
	(To record the cash paid for the rent expense which was missed)
Jul. 31	Accounts Receivable	$805
	Cash		$805
	(To record the NSF check)
Jul. 31	Service Charges	$25
	Cash		$25
	(To record the payment of service charges)