On July 31st, 2010, Fenton Company had a cash balance per books of $6,140. The s

Question

On July 31st, 2010, Fenton Company had a cash balance per books of $6,140. The statement from Jackson State Bank on that date showed a balance of $7,695.80. A comparison of the bank statement with cash account revealed the following facts.
1. The bank service charge for July was $25.
2. The bank collected a note receivable of $1,500 for Fenton Company on July 15, plus $30 of interest. The bank made a $10 charge for the collection. Fenton has not accrued any interest on the note.
3. The July 31 receipts of $1,193.10 were not included in the bank deposits for July. These receipts were deposited by the company in a night deposit vault on July 31.
4. Company check No. 2480 issued to H. Coby, a creditor, for $384.
5. Checks outstanding on July 31 totaled $1,980.10.
6. On July 31 the bank statement showed an NSF charged of $690 for a check received by the company from P. Figura, a customer, on account.

Instructions
(a) Prepare the bank reconciliation as of July 31.


(b) Prepare the necessary adjusting entries at July 31.

Explanation / Answer

Bank Recomciliation Statement July 31st, 2010 a) Balance as per bank statement $7,695.80 Add: Deposit in transit 1,193.10 Less: Checks outstanding -1,980.10 Correct Cash balance $6,908.80 Balance as per books $6,140 Add: Interest collection $30 Collect cash from notes receivable 1,500 1,530 $7,670 Less: Service charge $25 Bank charges for collection 10 NSF charged for a check received 690 Cheque issued to a creditor 384 1,109 6,561 b) Journals 1 Cash 1,530                Interest received 30               Notes receivable 1,500 2 Office expenses 725                Cash 725

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.