Question

Journalize the entry or entries that should be made by the company based on the table below

Cash Balance according to the bank statement ...................................................$31,350

Add Deposit in transit, not recorded by bank.........................................................$4,150

35,500



Deduct Checks outstanding.........................................................................................$2,870

Adjusted Balance............................................................................................................$32,630



Cash balance according to the company’s records at August 31........................... $32,110

Add Error in recording check as $710 instead of $170..............................................$540

$32,650

Deduct Bank service charge for................................................................................... $20.

Adjusted Balance..............................................................................................................$32,630

Answer 1

Based on the information provided, the following journal entries should be made by the company:

1. To record the deposit in transit:

Date: [Date of deposit]

Account Debit: Cash (or Bank Receivable) - $4,150

Account Credit: Deposit in Transit - $4,150

2. To record the outstanding checks:

Date: [Date of outstanding checks]

Account Debit: Outstanding Checks - $2,870

Account Credit: Cash (or Bank Receivable) - $2,870

3. To record the correction of the check recording error:

Date: [Date of correction]

Account Debit: Cash (or Bank Receivable) - $540

Account Credit: Error in Recording Check - $540

4. To record the bank service charge:

Date: [Date of bank service charge]

Account Debit: Bank Service Charge Expense - $20

Account Credit: Cash (or Bank Receivable) - $20

After making these journal entries, the adjusted balance in the company's records would match the adjusted balance according to the bank statement, which is $32,630.