Question

In: Accounting

On August 31, 2019, the balance in the checkbook and the Cash account of the Dry...

On August 31, 2019, the balance in the checkbook and the Cash account of the Dry Creek Bed and Breakfast was $12,236. The balance shown on the bank statement on the same date was $13,172.

Notes

  1. The firm’s records indicate that a $1,400 deposit dated August 30 and a $696 deposit dated August 31 do not appear on the bank statement.
  2. A service charge of $8 and a debit memorandum of $295 covering an NSF check have not yet been entered in the firm’s records. (The check was issued by Art Corts, a credit customer.)
  3. The following checks were issued but have not yet been paid by the bank:
Check 712, $ 105
Check 713, $ 120
Check 716, $ 233
Check 736, $ 572
Check 739, $ 73
Check 741, $ 115

  

  1. A credit memorandum shows that the bank collected a $2,059 note receivable and interest of $58 for the firm. These amounts have not yet been entered in the firm’s records.

Required:

  1. Prepare a bank reconciliation statement for the firm as of August 31.
  2. Record general journal entries for items on the bank reconciliation statement that must be journalized.


Analyze:
What effect did the journal entries recorded as a result of the bank reconciliation have on the fundamental accounting equation?

Solutions

Expert Solution

ekkarill92 answered 2 years ago
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