Question

QUSLIUI J View Policies Current Attempt in Progress The following information pertains to Sandhill Company. 1. Cash balance per books, August 31, $7,374. 2. Cash balance per bank, August 31, $7,338. 3. Outstanding checks, August 31, $708. 4. August bank service charge not recorded by the depositor $60. 5. Deposits in transit, August 31, $3,710. In addition, $3,026 collected for Sandhill Company in August by the bank through electronic funds transfer. The accounts receivable collection has not been recorded Sandhill Company. Prepare a bank reconciliation at August 31, 2022. (List items that increase balance as per bank & books first.) SANDHILL COMPANY Bank Reconciliation Journalize the adjusting entries at August 31 on the books of Sandhill Company. (Credit account titles are automatically indented when amount is entered. Do not indent manual Date Account Titles and Explanation Debit Credit July 31 (To record electronic funds transfer received by bank) July 31 (To record bank service charge) e Textbook and Media List of Accounts

Answer 1

The adjusted cash balance for Sandhill Company as of August 31, 2022, is $10,324. This is calculated by adding the cash balance per books ($7,374) to the deposits in transit ($3,710) and the electronic funds transfer collected by the bank ($3,026), and then subtracting the outstanding checks ($708) and the unrecorded bank service charge ($60).

Step-by-step explanation:

In preparing the bank reconciliation for Sandhill Company as of August 31, 2022, several adjustments were made to reconcile the cash balances per the company's books and the bank statement. Firstly, we added the deposits in transit and the electronic funds transfer collected by the bank to the cash balance per books. Deposits in transit represent funds that the company has recorded but have not yet been processed by the bank, while electronic funds transfers received directly by the bank need to be added to the company's cash balance.

Next, we deducted outstanding checks and the unrecorded bank service charge from the combined balance. Outstanding checks are those issued by the company but not yet presented to the bank for payment. The unrecorded bank service charge, if not previously accounted for, needs to be subtracted to adjust the cash balance.

The final adjusted cash balance of $10,324 reflects the reconciled amount, considering all the adjustments made to the initial cash balances per books and per bank. This reconciliation process ensures that the company's financial records align with the actual cash position, providing an accurate representation of the company's liquidity.