Question

The following information pertains to Lance Company.

1. Cash balance per bank, July 31, $7,328.
2. July bank service charge not recorded by the depositor $38.
3. Cash balance per books, July 31, $7,364.
4. Deposits in transit, July 31, $2,700.
5. $2,016 collected for Lance Company in July by the bank through electronic funds transfer. The collection has not been recorded by Lance Company.
6. Outstanding checks, July 31, $686.
A. Prepare a bank reconciliation at July 31, 2017.
B. Journalize the adjusting entries at July 31 on the books of Lance Company.

Answer 1

Bank Reconciliation statement :

Cash balance as per Bank - - - - - $7328

Add: Deposit in transit - - - - - - - - $2700

Less: Outstanding checks - - - - - - $686

Adjusted cash balance - - - - - - - $9342

Cash balance as per Book - - - - - $7364

Add: Electronic Fund transfer - - - $2016

Less: unrecorded service charges-- $38

Adjusted cash balance - - - - - - - - - $9342

B.)

Dr. Cash................................2,016

Cr. Bank.........................................2,016

Being Cash Receipt by funds transfer not captured in Cash book

Dr. Bank Charges.............................38

Cr. Cash.....................................................38

Being Bank Charges for the month of July

Step-by-step explanation:

Bank Reconciliation statement :

Cash balance as per Bank - - - - - $7328

Add: Deposit in transit - - - - - - - - $2700

Less: Outstanding checks - - - - - - $686

Adjusted cash balance - - - - - - - $9342

Cash balance as per Book - - - - - $7364

Add: Electronic Fund transfer - - - $2016

Less: unrecorded service charges-- $38

Adjusted cash balance - - - - - - - - - $9342

B.)

Dr. Cash................................2,016

Cr. Bank.........................................2,016

Being Cash Receipt by funds transfer not captured in Cash book

Dr. Bank Charges.............................38

Cr. Cash.....................................................38

Being Bank Charges for the month of July