Required information Problem 8-4A Preparing a bank reconciliation and recording

Question

Required information Problem 8-4A Preparing a bank reconciliation and recording adjustments LO P3 [The following information applies to the questions displayed below.] The following information is available to reconcile Branch Company's book balance of cash with its bank statement cash balance as of July 31, 2017 a. On July 31, the company's Cash account has a $25,860 debit balance, but its July bank statement shows a $28,835 b. Check No. 3031 for $1,780 and Check No. 3040 for $882 were outstanding on the June 30 bank reconciliation. Check cash balance No. 3040 is listed with the July canceled checks, but Check No. 3031 is not. Also, Check No. 3065 for $666 and Check No. 3069 for $2,548, both written in July, are not among the canceled checks on the July 31 statement. c. In comparing the canceled checks on the bank statement with the entries in the accounting records, it is found that Check No. 3056 for July rent expense was correctly written and drawn for $1,240 but was erroneously entered in the accounting records as $1,230 d. The July bank statement shows the bank collected $8,000 cash on a noninterest-bearing note for Branch, deducted a $40 collection expense, and credited the remainder to its account. Branch had not recorded this event before receiving e. The bank statement shows an $805 charge for a $795 NSF check plus a $10 NSF charge. The check had been f. The July statement shows a $12 bank service charge. It has not yet been recorded in miscellaneous expenses because g. Branch's July 31 daily cash receipts of $9,152 were placed in the bank's night depository on that date but do not appear the statement. received from a customer, Evan Shaw. Branch has not yet recorded this check as NSF no previous notification had been received on the July 31 bank statement

Explanation / Answer

BRANCH COMPANY Bank Reconciliation 31-Jul-17 Bank statement balance $28,835 Book balance $25,860 Add: Add: Deposit of July 31 $9,152 Proceeds of note less collection charge $7,960 9152 7960 37987 33820 Deduct: Deduct: Check No. 3031 1,780 NSF check including fee 805 Check No. 3065 666 Service charge 12 Check No. 3069 2,548 Error (Check 3056) 1240-1230 10 4994 827 Adjusted bank balance 32993 Adjusted book balance 32993

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