[The following information applies to the questions displayed below.] The follow
ID: 2484646 • Letter: #
Question
[The following information applies to the questions displayed below.]
The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31, 2015.
On July 31, the company’s Cash account has a $24,752 debit balance, but its July bank statement shows a $26,261 cash balance.
Check No. 3031 for $1,190 and Check No. 3040 for $587 were outstanding on the June 30 bank reconciliation. Check No. 3040 is listed with the July canceled checks, but Check No. 3031 is not. Also, Check No. 3065 for $371 and Check No. 3069 for $1,958, both written in July, are not among the canceled checks on the July 31 statement.
In comparing the canceled checks on the bank statement with the entries in the accounting records, it is found that Check No. 3056 for July rent was correctly written and drawn for $1,220 but was erroneously entered in the accounting records as $1,210.
A credit memorandum enclosed with the July bank statement indicates the bank collected $6,500 cash on a non-interest-bearing note for Branch, deducted a $33 collection fee, and credited the remainder to its account. Branch had not recorded this event before receiving the statement.
A debit memorandum for $805 lists a $795 NSF check plus a $10 NSF charge. The check had been received from a customer, Evan Shaw. Branch has not yet recorded this check as NSF.
Enclosed with the July statement is a $10 debit memorandum for bank services. It has not yet been recorded because no previous notification had been received.
Branch’s July 31 daily cash receipts of $7,652 were placed in the bank’s night depository on that date but do not appear on the July 31 bank statement.
Prepare the bank reconciliation for this company as of July 31, 2015.
Prepare the journal entries necessary to bring the company’s book balance of cash into conformity with the reconciled cash balance as of July 31, 2015. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. )
1.
Prepare the adjusting entry required, if any, related to the July 31 cash balance.
2.
Prepare the adjusting entry required, if any, related to the outstanding checks.
3.
Prepare the adjusting entry required, if any, related to Check No. 3056.
4.
Prepare the adjusting entry required, if any, related to the non-interest-bearing note.
5.
Prepare the adjusting entry required, if any, related to the NSF check.
6.
Prepare the adjusting entry required, if any, related to bank service charges.
7.
Prepare the adjusting entry required, if any, related to the July 31 deposit.
The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31, 2015.
Explanation / Answer
DESCRIPTION AMOUNT BALANCE AS PER BANK STATEMENT $26261 ADD DEPOSIT IN TRANSIT $7652 LESS OUTSTANDING CHECKS CHECK 3031 ($1190) CHECK 3065 ($371) CHECK 3069 ($1958) ADJUSTED BANK BALANCE $30394 DESCRIPTION AMOUNT BOOK BALANCE $24752 ADD NON INTEREST BEARING NOTE COLLECTED $6500 LESS COOLECTION FEES FOR COLLECTION ($33) NSF CHECK OF EVAN SHAW ($795) NSF CHECK CHARGE ($10) BANK SERVICE CHARGE ($10) CORRECTION OF JULY RENT ($10) ADJUSTED BOOK BALANCE $30394 DESCRIPTION DEBIT CREDIT CASH $6467 BANK CHARGES $33 NON INTEREST BEARING NOTE $6500 (COLLECTION OF NOTE RECEIVABLE) ACCOUNTS RECEIVABLE $805 CASH $805 (RECORDING OF EVAN SHAW CHECK) BANK CHARGES $15 CASH $15 (TO RECORD BANK CHARGES) RENT EXPENSES $10 CASH $10 (TO RECORDING OF CORRECTION OF JULY RENT)
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