Question

On July 31, 2019, Crane Company had a cash balance per books of $6,245.00. The statement from Dakota State Bank on that date showed a balance of $7,795.80. A comparison of the bank statement with the Cash account revealed the following facts. 1. The bank service charge for July was $16.00. 2. The bank collected $1,625 for Crane Company through electronic funds transfer. 3. The July 31 receipts of $1,307.30 were not included in the bank deposits for July. These receipts were deposited by the company in a night deposit vault on July 31. 4. Company check No. 2480 issued to L. Taylor, a creditor, for $384.00 that cleared the bank in July was incorrectly entered as a cash payment on July 10 for $348.00. 5. Checks outstanding on July 31 totaled $1,965.10. On July 31, the bank statement showed an NSF charge of $680.00 for a check received by the company from W. Krueger, a customer, on account.

Answer 1

Solution:

Crane Company
Bank Reconciliation Statement
For the month of July
Particulars		Amount
Balance on bank statement		$7,795.80
Additions:
Outstanding Deposits	$1,307.30
Total Additions		$1,307.30
		$9,103.10
Deductions:
Outstanding checks	$1,965.10
Total Deductions		$1,965.10
Adjusted bank balance		$7,138.00
Balance in books		$6,245.00
Additions:
EFT Collection	$1,625.00
Total Additons		$1,625.00
		$7,870.00
Deductions:
Service Charge	$16.00
Incorrect recording of check 2480	$36.00
NSF Check	$680.00
Total Deductions		$732.00
Adjusted book balance		$7,138.00

Journal Entries - Crane Company
Date	Particulars	Debit	Credit
31-Jul	Cash Dr	$1,625.00
	To Accounts receivables		$1,625.00
	(To record EFT collection
31-Jul	Accounts receivables Dr	$680.00
	To Cash		$680.00
	(To record NSF check from customer)
31-Jul	Accounts payable	$36.00
	To Cash		$36.00
	(To correct error in recording check)
31-Jul	Miscellenous Expenses Dr	$16.00
	To Cash		$16.00
	(Being service charges debited by bank)