Question

Oriole Company has just received the August 31, 2020, bank statement, which is summarized below.

County National Bank		Disbursements			Receipts		Balance
Balance, August 1							$11,674
Deposits during August					$40,121		51,795
Note collected for depositor, including $50 interest					1,296		53,091
Checks cleared during August		$42,987					10,104
Bank service charges		25					10,079
Balance, August 31							10,079

The general ledger Cash account contained the following entries for the month of August.

Cash
Balance, August 1		12,522	Disbursements in August		43,493
Receipts during August		43,610

Deposits in transit at August 31 are $4,735, and checks outstanding at August 31 total $1,308. Cash on hand at August 31 is $386. The bookkeeper improperly entered one check in the books at $147 which was written for $165 for supplies (expense); it cleared the bank during the month of August.

Prepare a bank reconciliation dated August 31, 2020, proceeding to a correct balance and adjusting entries.

ORIOLE COMPANY Bank Reconciliation, August 31, 2020 County National Bank

Answer 1

Bank reconciliation

Balance as per bank statement august 31, 2020		$10079
Add:
Cash on hand	$386
Deposit in transit	$4735
		$5121
		$15200
Less: outstanding checks		-$1308
Correct cash balance		$13892
Balance as per books august 31, 2020 ($12522+$43610-$43493)		$12639
Add: note and interest collected		$1296
		$13935
Less:
Bank service charges	$25
Understated for supplies	$18
		-$43
Correct cash balance		$13892

.

B)

Date	account title	debit	credit
Aug 31 2020	cash	$1296
	Notes receivable		$1246
	Interest revenue		$50
Aug 31, 2020	bank service charges	$25
	Cash		$25
Aug 31, 2020	supplies expenses	$18
	Cash		$18

.

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