Question: Tizani Company's bank statement from Eastern National Bank at August 31, 2014, shows the information below. A summary of the Cash account in the ledger
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A summary of the Cash account in the ledger for August shows: Balance, August 1, $10,559; receipts $50,050; disbursements $47,794; and balance, August 31, $12,815. Analysis reveals that the only reconciling items on the July 31 bank reconciliation were a deposit in transit for $2,200 and outstanding checks of $2,925. The deposit in transit was the first deposit recorded by the bank in August. In addition, you determine that there were two errors involving company checks drawn in August:
(1) A check for $340 to a creditor on account that cleared the bank in August was journalized and posted for $430.
(2) A salary check to an employee for $275 was recorded by the bank for $277.
Instructions
(a) Prepare a bank reconciliation at August 31.
(b) Journalize the adjusting entries to be made by Tizani Company at August 31. Assume that interest on the note has not been accrued by thecompany.
Balance, August 1 August deposits Checks cleared in Augst 46,175 Balance, August 31 $11,284 47,521 Bank credit memoranda: Collection of note receivable plus $105 interest 17,146 $4,505 Interest earned Bank debit memorandum: Safety deposit box rent 30
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