The bank statement for Adcock Company indicates a balance of $830 on July 31. Th

Question

The bank statement for Adcock Company indicates a balance of $830 on July 31. The cash balance per books had a balance of $390 on this date. Additional information regarding the bank transactions for the company is as follows: Deposit of $640, representing cash receipts of July 31, did not appear on the bank statement. Outstanding checks totaled $390. Bank service charges for June amounted to $30. The bank collected a note receivable for the company for $1,000 plus $48 interest revenue. A NSF check for $328 from a customer was returned with the statement. Instructions Prepare a bank reconciliation schedule for July 31. Prepare the journal entries needed to update the cash T-account.

Explanation / Answer

Solution.

(a) Preparation of Bank Reconciliation Statement for July 31..

(b) Preparation of the journal entry needed to update the T shape cash account.

1. Adjusted cash receipt Dr. 640

To Cash 640

( To record the Adjusted cash receipts not appeared )

2.

Cash Dr. 390

To Outstanding cheque 390

( To record outstanding cheque )

3.

Bank service charges Dr. 30

To Cash 30

( To record bank service charges )

4.

Cash Dr. 1,048

To Note receivable 1,000

To Interest revenue 48

( To record Note receivable and interest revenue )

5.

NSF Cheque returned to customer Dr. 328

To Cash 328

( To record the NSF cheque returned to customer )

Particular Amount in ($) Debit balance as per cash book 390 Less : Cash deposite but did not appear on the bank statemebt (640) Less : Bank service charges (30) Add :Outstandig cheques total 390 Add : Bank collected note receivable 1000 Add : Bank collected interest 48 Less : NSF cheque returned to customer (328) Credit balance as per Bank Statement 830

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