On August 31, 2019, the balance in the checkbook and the Cash account of the Dry
ID: 2401931 • Letter: O
Question
On August 31, 2019, the balance in the checkbook and the Cash account of the Dry Creek Bed and Breakfast was $12,253. The balance shown on the bank statement on the same date was $13,182.
Notes
The firm’s records indicate that a $1,420 deposit dated August 30 and a $698 deposit dated August 31 do not appear on the bank statement.
A service charge of $7 and a debit memorandum of $305 covering an NSF check have not yet been entered in the firm’s records. (The check was issued by Art Corts, a credit customer.)
The following checks were issued but have not yet been paid by the bank:
A credit memorandum shows that the bank collected a $2,069 note receivable and interest of $60 for the firm. These amounts have not yet been entered in the firm’s records.
Required:
Prepare a bank reconciliation statement for the firm as of August 31.
Record general journal entries for items on the bank reconciliation statement that must be journalized.
Analyze:
What effect did the journal entries recorded as a result of the bank reconciliation have on the fundamental accounting equation?
Explanation / Answer
What effect did the journal entries recorded as a result of the bank reconciliation have on the fundamental accounting equal
Increase by (60-7)=$53
DRY CREEK BED AND BREAKFAST Bank Reconciliation Statement 08/31/19 Balance on bank statement 13182 Additions: Deposit in Transit 2118 Deductions: Check 712, 107 Check 713, 122 Check 716, 235 Check 736, 574 Check 739, 75 Check 741, 117 Total deductions 1230 Adjusted bank balance 14070 Balance in books 12253 Additions: note receivable 2069 Interest on note receivable 60 2129 Deductions: service charge 7 NSF check 305 312 Adjusted book balance 14070Related Questions
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