Perth Inc.'s bank statement from Main Street Bank at August 31, 2025, gives the following information.

A summary of the Cash account in the ledger for August shows the following: balance, August 1, \(\$ 18,700\); receipts \(\$ 74,000\); disbursements \(\$ 73,570\); and balance, August \(31, \$ 19,130\). Analysis reveals that the only reconciling items on the July 31 bank reconciliation were a deposit in transit for \(\$ 4,800\) and outstanding checks of \(\$ 4,500\). In addition, you determine that there was an error involving a company check drawn in August: A check for \(\$ 400\) to a creditor on account that cleared the bank in August was journalized and posted for \(\$ 40\).

Instructions

a. Determine deposits in transit.

b. Determine outstanding checks. (Hint: You need to correct disbursements for the check error.)

c. Prepare a bank reconciliation at August 31.

d. Journalize the adjusting entry(ies) to be made by Perth Inc. at August 31.

Transcribed Image Text:

Balance, August 1 August deposits Checks cleared in August Bank credit memorandum: Interest earned $18,400 71,000 68,678 45 Bank debit memorandum: Safety deposit box fee Service charge Balance, August 31 $ 25 50 20,692