The bank reconciliation prepared by Winfield Construction on June 30, 2014, appeared as follows:

The Cash account in the General Ledger appeared as follows on July 31:

A list of deposits made and cheques written during July, taken from the Cash Receipts Journal and Cash Disbursements Journal, is shown below:

The following bank statement is available for July:

In reviewing cheques returned by the bank, the bookkeeper noted that cheque #96 written by Winburn Construction in the amount of $420 was charged against Winfield's account in error by the bank. The NSF cheque was regarding a customer account, Jim Anderson.
Required
1. Prepare bank reconciliation at July 31.
2. Prepare the necessary journal entries to bring the General Ledger Cash account into agreement with the adjusted balance on the bank reconciliation.
Analysis Component:
If the journal entries in Part 2 were not recorded, what financial statement elements (net income, assets, liabilities, and equity) would be over- or understated?

Transcribed Image Text:

Winfleld Construction Bank Reconcillation June 30, 2014 $9,200 Book balance Add Deposit of June 30 in transit.... 1,350 $10,550 Deduct: Outstanding cheque #14 780 9,770Adjusted book balance. Cash Acct. No. 101 Date Explanation PR Debit Credit Balance 2014 June 30 Balance CR3 CD6 9,770 14,810 11,668 July 31 5,040 31 3,142 Deposits Made Cheques Written July8. 24. 31 1,675 1,445 640 53 54 964 382 Total July Cash Receipts.. $5,040 Total uly Cash Disbursements$3,142 Bank Statement July 31, 2014 Bank of Montreal To: Winfleld Construction Cheques/Charges Deposits/Credits Balance 9,200 10,085 9,569 10,824 12,269 11,887 NSF #52 #96 07/02 07/08 07/02 07/08 1,350 1,280 1,675 1,445 465 1,796 420 382 Charge 07/24 07 31 PMT Principal #54 07/31 INT Interest NSF Not Sufficient Funds SC Service Payment