Question

The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31.

  

1. On July 31, the company’s Cash account has a $25,740 debit balance, but its July bank statement shows a $27,575 cash balance.
2. Check No. 3031 for $1,300, Check No. 3065 for $426, and Check No. 3069 for $2,068 are outstanding checks as of July 31.
3. Check No. 3056 for July rent expense was correctly written and drawn for $1,220 but was erroneously entered in the accounting records as $1,210.
4. The July bank statement shows the bank collected $8,000 cash on a note for Branch. Branch had not recorded this event before receiving the statement.
5. The bank statement shows an $805 NSF check. The check had been received from a customer, Evan Shaw. Branch has not yet recorded this check as NSF.
6. The July statement shows a $12 bank service charge. It has not yet been recorded in miscellaneous expenses because no previous notification had been received.
7. Branch’s July 31 daily cash receipts of $9,132 were placed in the bank’s night depository on that date but do not appear on the July 31 bank statement.

Prepare the journal entries necessary to make the company’s book balance of cash equal to the reconciled cash balance as of July 31. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Record the adjusting entry required, if any, related to the July 31 cash balance.

Record the adjusting entry required, if any, related to the outstanding checks.

Record the adjusting entry required, if any, related to Check No. 3056.

Record the adjusting entry required, if any, for the collection of the note by bank for Branch.

Record the adjusting entry required, if any, related to the NSF check.

Record the adjusting entry required, if any, related to bank service charges.

Record the adjusting entry required, if any, related to the July 31 deposit.

Answer 1

Bank Reconciliation is a process of identifying the difference that exist between the company's bank balance as per bank statement supplied by bank and cash balance as per company's accounting records. Branch Company Bank Reconciliation July 31, 2017 Particulars $27,575 Book Balance Add: Particulars Bank Statement Balance Add: Amount Amount Amount Amount $25,740 $9,132 Bank Collection of Note Receivable $8,000 Deposit in Transit $8,000 $33,740 $36,707 Deduct: Error in posting [$1220-$1210] Deduct: Outstanding Check 3031 Outstanding Check 3065 Outstanding Check 3069 Total Deduction Adjusted Bank Balance $1,300 $426 $2,068 $10 $805 $12 NSF Check Bank Service Charge ($3,794) Total Deduction $32,913 Adjusted Book Balance ($827) $32,913 Particulars No Entry required No Entry required (No entry required outstanding checks) Rent Expense Cash (To record rectification entry) Cash Notes Receivable (To record collection of note receivable) Accounts Receivable Cash Date Debit Credit July 31 $0 $0 July 31 $10 $10 July 31 $8,000 $8,000 July 31 $805 $805 To Record NSF check) Bank Charges Cash July 31 $12 $12 (To Record NSF check) July 31 No Entry required No Entry required (No entry required for July 31 deposit)