Question

Harrison Company maintains a checking account at the First National City Bank. The bank provides a bank statement along with canceled checks on the last day of each month. The July 2021 bank statement included the following information: Balance, July 1, 2021 Deposita Checks processed Service charges NSF checks Monthly payment on note, deducted directly by bank from account (includes $870 in interest) Balance, July 31, 2021 $ 56,103 180.400 (193,510) (75) (1,650) (3.770) The company's general ledger account had a balance of $40,448 at the end of July. Deposits outstanding totaled $7.200 and all checks written by the company were processed by the bank except for those totaling $8,510. In addition, a $2,900 July deposit from a credit customer was recorded as a $290 debit to cash and credit to accounts receivable, and a check correctly recorded by the company as a $75 disbursement was incorrectly processed by the bank as a $750 disbursement Required: 1. Prepare a bank reconciliation for the month of July. 2. Prepare the necessary Journal entries at the end of July to adjust the general ledger cash account Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a bank reconciliation for the month of July. Bank Balance to corrected Balance Balance per bank statement Corrected cash balance Book Balance to corrected Balance Balance per books Corrected cash balance

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.

Ans 1 Amount Ans 2 Event Credit Debit $2,610 $2,610 Particulars Bank Balance to Correted Balance Balance as per Bank Statement Deposit in transit Error in posting ($750-$75] Outstanding checks Corrected Cash Balance $38,198 $7,200 $675 ($8,510) $37,563 Acount Title Cash Accounts Receivable Interest Expense Accounts Receivable Miscellaneous Expense Note Payable Cash $870 $1,650 $75 $2,900 $5,495 Book Balance to Correted Balance Balance as per Books Error in recording ($2900-$290] Payment of note, including interest of $870 NSF check Bank service charge Corrected Cash Balance $40,448 $2,610 ($3,770) ($1,650) ($75) $37,563