E7-6 Sally Rice is unable to reconcile the bank balance at January 31. Sally’s r

Question

E7-6 Sally Rice is unable to reconcile the bank balance at January 31. Sally’s reconciliation is shown here. Prepare bank reconciliation and adjusting entries. (LO 5), AP Cash balance per bank $3,677.20 Add: NSF check 450.00 Less: Bank service charge 28.00 Adjusted balance per bank $4,099.20 Cash balance per books $3,975.20 Less: Deposits in transit 590.00 Add: Outstanding checks 770.00 Adjusted balance per books $4,155.20 Instructions (a)What is the proper adjusted cash balance per bank? (b)What is the proper adjusted cash balance per books? (c)Prepare the adjusting journal entries necessary to determine the adjusted cash balance per books.

Explanation / Answer

AP cash balance as per bank =3677.20

Adjusted balance as per Bank 4099.20

Cash balance as per books 3975.20

-Deposits in transit 590

Adjusted balance as per books 4155.20

Proper adjusted cash balance per bank =4155.20

Proper cash balance as per books =4155.20

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