Question

The following information pertains to Blossom Company.

1. Cash balance per bank, July 31, $10,962.
2. July bank service charge not recorded by the depositor $63.
3. Cash balance per books, July 31, $11,088.
4. Deposits in transit, July 31, $4,473.
5. $2,520 collected for Blossom Company in July by the bank through electronic funds transfer. The accounts receivable collection has not been recorded by Blossom Company.
6. Outstanding checks, July 31, $1,890.
A. Prepare a bank reconciliation at July 31, 2010
B. Journalize the adjusting entries at July 31 on the books of Sunland Company.

Answer 1

A. Adjusted cash balance per bank $13,545

Adjusted cash balance per books $13,545

B. July 31

Dr Cash $2,520

Cr Accounts Receivable $2,520

July 31

Dr Bank service charge $63

Cr Cash $63

Step-by-step explanation:

A. Preparation of a bank reconciliation at July 31, 2010

PHAROAH COMPANY

Bank Reconciliation

31-Jul-10

Cash Balance per bank statement $10,962

Add: Deposit in transit $4,473

$15,435

Less: Outstanding checks $1,890

Adjusted cash balance per bank $13,545

Cash balance per books $11,088

Add: Electronic fund transfer received $2,520

$13,608

less; Bank service charge $63

Adjusted cash balance per books $13,545

B. Preparation of the adjusting entries at July 31 on the books of Sunland Company.

July 31

Dr Cash $2,520

Cr Accounts Receivable $2,520

(To record electronic fund transfer received by bank)

July 31

Dr Bank service charge $63

Cr Cash $63

(To record bank service charges )