The following data were accumulated for use in reconciling the bank account of M

Question

The following data were accumulated for use in reconciling the bank account of Maplewood Co. for July: 1.Cash balance according to the company's records at July 31, $22,070. 2.Cash balance according to the bank statement at July 31, $23,250. 3.Checks outstanding, $4,480. 4.Deposit in transit, not recorded by bank, $3,600. 5.A check for $480 in payment of an account was erroneously recorded in the check register as $840. 6.Bank debit memo for service charges, $60. Journalize the entries that should be made by the company that (a) increase cash and (b) decrease cash. (a) (b)

Explanation / Answer

Cash Balance according to Company's Records = $ 22,070

Increase in Cash:

Checks Outstanding                                               =   $ 4,480

Check erroneously recorded in the register           =    $   360 (840 - 480)

Decrease in Cash:

Deposit in transit, not recorded by Bank               =    - $ 3,600

Bank Debit memo for service charges                 =    - $    60

Cash Balance as per Bank Statement                  = $ 23,250

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