On July 31, Arthur Companys Cash in Bank account had a balance of $8,112.62. On that date,
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Question:
On July 31, Arthur Company’s Cash in Bank account had a balance of $8,112.62.
On that date, the bank statement indicated a balance of $10,170.62.
A comparison of returned checks and bank advices revealed the following:
- Deposits in transit July 31 amounted to $3,316.12.
- Outstanding checks July 31 totaled $1,251.12.
- The bank erroneously charged a $215.00 check of Solomon Company against the Arthur bank account.
- A $15 bank service charge has not yet been recorded by Arthur Company.
- Arthur neglected to record $4,000.00 borrowed from the bank on a ten percent six-month note. The bank statement shows the $4,000.00 as a deposit.
- Included with the returned checks is a memo indicating that J. Martin’s check for $610.00 had been returned NSF. Martin, a customer, had sent the check to pay an account of $660.00 less a $50 discount.
- Arthur Company recorded a $107.00 payment for repairs as $1,070.00.
Required
a. Prepare a bank reconciliation for Arthur Company at July 31.
b. Prepare the journal entry (or entries) necessary to bring the Cash in Bank account into agreement with the reconciled cash balance on the bank reconciliation.
Note: Do not round answers - enter using two decimal places, when needed.
ARTHUR COMPANY Bank Reconciliation July 31 | ||||||||
---|---|---|---|---|---|---|---|---|
AnswerDeposits not credited by bankEnding balance from bank statementOutstanding checksProceeds of noteService chargeReconciled cash balance | Answer | Balance from general ledger | Answer | |||||
Add: | AnswerDeposits not credited by bankEnding balance from bank statementOutstanding checksProceeds of noteService chargeReconciled cash balance | Answer | Add: | AnswerDeposits not credited by bankEnding balance from bank statementOutstanding checksProceeds of noteService chargeReconciled cash balance | Answer | |||
Add: | Bank error- Solomon Company check | Answer | ||||||
charged against Arthur Company's account | Answer | Answer | Answer | |||||
Answer | Answer | |||||||
Less: | AnswerDeposits not credited by bankEnding balance from bank statementOutstanding checksProceeds of noteService chargeReconciled cash balance | Answer | Less: | AnswerDeposits not credited by bankEnding balance from bank statementOutstanding checksProceeds of noteService chargeReconciled cash balance | Answer | |||
Less: | NSF Check | Answer | ||||||
AnswerDeposits not credited by bankEnding balance from bank statementOutstanding checksProceeds of noteService chargeReconciled cash balance | Answer | AnswerDeposits not credited by bankEnding balance from bank statementOutstanding checksProceeds of noteService chargeReconciled cash balance | Answer |
GENERAL JOURNAL | ||||
---|---|---|---|---|
Date | Description | Debit | Credit | |
July | 31 | AnswerAccounts ReceivableCash in BankMiscellaneous ExpenseNotes PayableRepairs ExpenseSales Discounts | Answer | Answer |
AnswerAccounts ReceivableCash in BankMiscellaneous ExpenseNotes PayableRepairs ExpenseSales Discounts | Answer | Answer | ||
To record proceeds of note. | ||||
31 | AnswerAccounts ReceivableCash in BankMiscellaneous ExpenseNotes PayableRepairs ExpenseSales Discounts | Answer | Answer | |
AnswerAccounts ReceivableCash in BankMiscellaneous ExpenseNotes PayableRepairs ExpenseSales Discounts | Answer | Answer | ||
To correct recording of the check. | ||||
31 | AnswerAccounts ReceivableCash in BankMiscellaneous ExpenseNotes PayableRepairs ExpenseSales Discounts | Answer | Answer | |
AnswerAccounts ReceivableCash in BankMiscellaneous ExpenseNotes PayableRepairs ExpenseSales Discounts | Answer | Answer | ||
To record service charge. | ||||
31 | AnswerAccounts ReceivableCash in BankMiscellaneous ExpenseNotes PayableRepairs ExpenseSales Discounts | Answer | Answer | |
AnswerAccounts ReceivableCash in BankMiscellaneous ExpenseNotes PayableRepairs ExpenseSales Discounts | Answer | Answer | ||
Cash in Bank | Answer | Answer | ||
To reclassify NSF check as an account receivable. |
Related Book For
Financial Accounting
ISBN: 978-1259103285
5th Canadian edition
Authors: Robert Libby, Patricia Libby, Daniel Short, George Kanaan, M
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