Question

E4-9 Spielberg Company's general ledger shows a checking account balance of $22,970 on July 31, 2021. 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. Required: l. Prepare a bank reconciliation to calculate the correct ending balance of cash on July 31, 2021. 2. Record the necessary entry(ies) to adjust the balance for cash.

Answer 1

Calculate bank reconciliation statement showing correct cash balance as on July 31, 2021, which is as follows: Bank Reconciliation Statement Particulars Amount (S) Particulars Amount (S) Bank statement balance 22,490 General ledger balance 22,970 Add: Outstanding deposits 1,885 Less: Service fees Less: Outstanding check 1,460 Adjusted balance of bank 22,915 Adjusted book balance 22,915 55 Prepare journal entry to record adjustment in cash balance, which is as follows: Date Account title and explanation 31/07/2021 Bank service fees Cash (To record bank service charges) Debit ($) Credit ($) $550 $55