E7-8 Prepare bank reconciliation and adjusting entries. The following informatio
ID: 2509350 • Letter: E
Question
E7-8 Prepare bank reconciliation and adjusting entries. The following information pertains to Lance Company 1.Cash balance per bank, July 31, $7,328. . 2.July bank service charge not recorded by the depositor $38. .3.Cash balance per books, July 31, $7,364 .4.Deposits in transit, July 31, S2,700. . 5.$2,016 collected for Lance Company in July by the bank through electronic funds transfer. The collection has not been recorded by Lance Company .6.Outstanding checks, July 31, $686. Instructions (a) Prepare a bank reconciliation at July 31, 2017. (b) Journalize the adjusting entries at July 31 on the books of Lance Company E7-9 Prepare bank reconciliation and adjusting entries This information relates to the Cash account in the ledger of Howard Company Balance September 1-$16,400; Cash deposited-$64,000 Balance September 30-$17,600; Checks written-$62,800 The September bank statement shows a balance of $16,500 at September 30 and the following memoranda. Debits Credits Collection of electronic funds transfer $1,830 NSF check: H. Kane $560 Interest earned on checking account 45 Safety deposit box rent 60 At September 30, deposits in transit were $4,738 and outstanding checks totaled $2,383 Instructions (a) Prepare the bank reconciliation at September 30, 2017. (b) Prepare the adjusting entries at September 30, assuming the NSF check was from a customer on account.Explanation / Answer
E7-8. - (a) Prepare a bank reconciliation at July 31, 2017:
Cash balance per bank statement = $7,328
Add: Deposit in transit = $2,700
Less: Outstanding checks = $(686)
Adjusted cash balance per bank = $9,342
Cash balance per books = $7,364
Add: Collection by bank through electronic fund transfer = $2,016
Less: Bank service charge = $(38)
Adjusted cash balance per books = $9,342
E7-8. (b) Journalize the adjusting entries at July 31, 2017:
Cash A/c Debit $2,016
To Notes Receivable A/c Credit $2,106
Bank Service Charge A/c Debit $38
To Cash A/c Credit $38
E7-9. - (a) Prepare a bank reconciliation at September 30, 2017:
Cash balance as per bank statement = $16,500
Add: Deposit in transit = $4,738
Less: Outstanding checks = $(2,383)
Adjusted cash balance per bank = $18,855
Cash balance per books = $17,600
Add: Collection of note receivable = $1,830
Add: Interest earned = $45
Less: NSF check = $(560)
Less: safety deposit box rent = $(60)
Adjusted cash balance per books = $18,855
E7-9. (b) Journalize the adjusting entries at September 30, 2017:
Cash A/c Debit $1,830
To Note Receivable A/c Credit $1,830
Cash A/c Debit $45
To Interest Income A/c Credit $45
Accounts Receivable (NSF) A/c Debit $560
To Cash A/c Credit $560
Miscellaneous expense (Safety Deposit Box Rent) A/c Debit $60
To Cash A/c Credit $ 60
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