On August 31, 2019, the balance in the checkbook and the Cash account of the Dry
ID: 2550245 • Letter: O
Question
On August 31, 2019, the balance in the checkbook and the Cash account of the Dry Creek Bed and Breakfast was $12,981. The balance shown on the bank statement on the same date was $13,897.
Notes
The firm’s records indicate that a $1,500 deposit dated August 30 and a $701 deposit dated August 31 do not appear on the bank statement.
A service charge of $8 and a debit memorandum of $270 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:
Check 712,
$
110
Check 713,
$
125
Check 716,
$
238
Check 736,
$
577
Check 739,
$
78
Check 741,
$
120
A credit memorandum shows that the bank collected a $2,094 note receivable and interest of $53 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?
Check 712,
$
110
Check 713,
$
125
Check 716,
$
238
Check 736,
$
577
Check 739,
$
78
Check 741,
$
120
Explanation / Answer
Solution:-
Bank reconciliation statement for the firm as of August 31
Jounal Entries:-
1. Bank Charges A/c Dr. 8
ACCOUNT receivable Dr. 270
To Cash 278
2. Account Receivable Dr. 2094
Interest A/c Dr. 53
To Cash 2147
Cash Balance as per Bank Statement 13897 Add:- Deposit in Transit (1500+701) 2201 Less:- Outstanding check (check 712, 713, 716,736,739,741) 1248 Adjusted Balance as per Bank 14850Related Questions
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