Exercise 7-6 Rachel Sells is unable to reconcile the bank balance at January 31.

Question

Exercise 7-6

Rachel Sells is unable to reconcile the bank balance at January 31. Rachel’s reconciliation is shown here.

44.50

$5,052.70

795.00

$5,141.70

(a) What is the proper adjusted cash balance per bank? (Round answers to 2 decimal places, e.g. 52.75.)

(b) What is the proper adjusted cash balance per books? (Round answers to 2 decimal places, e.g. 52.75.)

(c) Prepare the adjusting journal entries necessary to determine the adjusted cash balance per books. (Round answers to 2 decimal places, e.g. 52.75. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Exercise 7-6 ACCOUNT TITLES TO USE:

Cash balance per bank $4,622.20 Add: NSF check 475.00 Less: Bank service charge

44.50

Adjusted balance per bank

$5,052.70

Cash balance per books $4,920.20 Less: Deposits in transit 573.50 Add: Outstanding checks

795.00

Adjusted balance per books

$5,141.70

Explanation / Answer

a The proper adjusted cash balance per bank = 4622.2+573.5-795= $4400.7 b The proper adjusted cash balance per books = 4920.2-475-44.5= $4400.7 c 31-Jan Accounts Receivable 475             Cash 475 31-Jan Bank Charges Expense 44.5             Cash 44.5

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