Exercise 8-5

Record necessary journal entry or entries to correct cash balance (L.O. 4)

The following is a bank reconciliation for Brian Company as of August 31.

Balance per bank statement, August 31

$ 7,470

Add: Deposit in transit

5,676

$13,146

Less: Outstanding checks

6,024

Adjusted balance, August 31

$ 7,122

Balance per ledger, August 31

$ 7,248

Add: Error correction*

54

$ 7,302

Less: NSF check

$150

Service and collection charges

30

180

Adjusted balance, August 31

$ 7,122

* The error occurred when the bookkeeper debited Accounts Payable and credited Cash for $93.00, instead of the correct amount, $39.00

Prepare the journal entry or entries needed to adjust or correct the Cash account.