Question

The following information pertains to Sunland Company.

1. Cash balance per bank, July 31, $7,688.
2. July bank service charge not recorded by the depositor $47.
3. Cash balance per books, July 31, $7,724.
4. Deposits in transit, July 31, $3,060.
5. $2,376 collected for Sunland Company in July by the bank through electronic funds transfer. The collection has not been recorded by Sunland Company.
6. Outstanding checks, July 31, $695.

Required:
a. Prepare a bank reconciliation at July 31, 2022.
b.Journalize the adjusting entries at July 31 on the books of Sunland Company.

Answer 1

A. Adjusted cash balance per bank $10,053

Adjusted cash balance per book $ 10,053

B. July 31

Dr Cash $ 2,376

Cr Accounts Receivable $ 2,376

July 31

Dr Bank service charge $47

Cr Cash $ 47

Step-by-step explanation:

Preparation of Bank Reconciliation

31-Jul-22

SUNLAND COMPANY

Cash Balance per bank statement $7,688

Add: Deposit in transit $ 3,060

$ 10,748

Less: Outstanding checks $ 695

Adjusted cash balance per bank $ 10,053

Cash balance per books $ 7,724

Add: Electronic fund transfer received $2,376

$10,100

less; Bank service charge $ 47

Adjusted cash balance per books $10,053

B. Preparation of Journal entry

July 31

Dr Cash $ 2,376

Cr Accounts Receivable $ 2,376

(To record electronic fund transfer received by bank)

July 31

Dr Bank service charge $ 47

Cr Cash $ 47

(To record bank service charges )