Question

1. Cash balance per bank, July 31, $7,308.

2. July bank service charge not recorded by the depositor $42.
3. Cash balance per books, July 31, $7,392.
4. Deposits in transit, July 31, $2,982.
5. $1,680 collected for Cullumber Company in July by the bank through electronic funds transfer. The accounts receivable collection has not been recorded by Cullumber Company.
6. Outstanding checks, July 31, $1,260.
(a) Prepare a bank reconciliation at July 31, 2010
(b) Journalize the adjusting entries at July 31 on the books

Answer 1

Part a

Bank reconciliation at July 31, 2010

Balance as per Bank Statement $ 7,308

Add Outstanding Lodgments $2,982

Less Unpresented Checks ($1,260)

Balance as per Cash Book $9,030

Part b

Adjusting entries at July 31 on the books

Item 2

Debt : Bank service charge $42

Credit : Cash $42

To record the Bank service charge

Item 5

Debt : Cash $1,680

Credit : EFT Payment - Account Receivable $1,680

To record the amount collected on behalf of Cullumber Company

Step-by-step explanation:

The Bank Reconciliation Statement is used to determine the true Cash Balance at the end of the month.

Updated Cash Book

Debit :

Balance $7,392

Credit Transfer $1,680

Total $9,072

Credit

Bank service charge $42

Balance (Balancing amount) $9,030

Total $9,072