Question

Spielberg Company's general ledger shows a checking account balance of $22,970 on July 31, 2018. The July cash receipts of $1,885, included in the general ledger balance, are placed in the night depository at the bank on July 31 and processed by the bank on August 1. The bank statement dated July 31 shows bank service fees of $55. The bank processes all checks written by the company by July 31 and lists them on the bank statement, except for one check totaling $1,460. The bank statement shows a balance of $22,490 on July 31.

1. Prepeare a bank reconciliation to calculate the correct ending balance of cash on July 31, 2018.
2. Record the necessary entry(ies) to adjust the balance for cash.

Answer 1

Step-by-step explanation:

Bank reconciliation: Bank reconciliation deals with balance of bank statements and balance of cash statements. The aim is to compare those two statements to allow the organization to run smoothly.

There are various transactions because of which the balance of the bank statement and the balance of the cash statement do not match We change the transactions accordingly to match those statements.

The preparation of the bank reconciliation statement on July 31, 2018 is presented in the spreadsheet. Kindly find the attachment below:

2. The adjusting entry would be

Bank service charge expense A/c Dr $55

To Cash A/c $55

(Being the bank service charges is recorded)