Question

The bank statement for Adcock Company indicates a balance of $830 on July 31. The cash balance per books had a balance of $390 on this date. The following information pertains to the bank transactions for the company. 1. Deposit of $840, representing cash receipts of July 31, did not appear on the bank statement. 2. Outstanding checks totaled $390. 3. Bank service charges for June amounted to $30. 4. The bank collected a note receivable for the company for $1,200 plus $48 interest revenue. 5. A NSF check for $328 from a customer was returned with the statement.

Prepare a bank reconciliation for July 31. ADCOCK COMPANY Bank Reconciliation July 31 Cash Balance Per BankDeposit in TransitOutstanding ChecksNSF CheckAdjusted Cash Balance Per BooksAccounts Payable ErrorCollection of Note and InterestBank Service ChargeAdjusted Cash Balance Per Bank $ AddLess : Collection of Note and InterestOutstanding ChecksCash Balance Per BankAdjusted Cash Balance Per BankBank Service ChargeNSF CheckDeposit in TransitAdjusted Cash Balance Per BooksAccounts Payable Error LessAdd : Deposit in TransitOutstanding ChecksCash Balance Per BankAdjusted Cash Balance Per BankAdjusted Cash Balance Per BooksNSF CheckCollection of Note and InterestAccounts Payable ErrorBank Service Charge Cash Balance Per BankCollection of Note and InterestDeposit in TransitOutstanding ChecksAdjusted Cash Balance Per BooksAccounts Payable ErrorBank Service ChargeNSF CheckAdjusted Cash Balance Per Bank $ Bank Service ChargeAdjusted Cash Balance Per BankOutstanding ChecksAdjusted Cash Balance Per BooksNSF CheckCash Balance Per BooksAccounts Payable ErrorDeposit in TransitCollection of Note and Interest $ LessAdd : Bank Service ChargeOutstanding ChecksNSF CheckDeposit in TransitAdjusted Cash Balance Per BooksAccounts Payable ErrorAdjusted Cash Balance Per BankCollection of Note and InterestCash Balance Per Books AddLess :     Deposit in Transit    Adjusted Cash Balance Per Bank    Adjusted Cash Balance Per Books    Outstanding Checks    Bank Service Charge    NSF Check    Accounts Payable Error    Cash Balance Per Books    Collection of Note and Interest     $     Accounts Payable Error    Deposit in Transit    Outstanding Checks    Adjusted Cash Balance Per Books    NSF Check    Collection of Note and Interest    Bank Service Charge    Adjusted Cash Balance Per Bank    Cash Balance Per Books     Collection of Note and InterestDeposit in TransitNSF CheckBank Service ChargeAdjusted Cash Balance Per BankAdjusted Cash Balance Per BooksCash Balance Per BooksOutstanding ChecksAccounts Payable Error $

Prepare any adjusting entries necessary as a result of the bank reconciliation. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July. 31 (To record collection of note receivable and interest by the bank) 31 (To record NSF check) 31

Answer 1

	ADCOCK COMPANY
	Bank Reconciliation
	July 31
Cash balance per bank		830
Add: Deposit in Transit		840
Less: Outstanding Checks		390
Adjusted Cash Balance Per Bank		1280
Cash Balance Per Books		390
Add: Collection of Note and Interest		1248
Less:
Bank service charge	30
NSF check	328	358
Adjusted cash balance per books		1280
Jul-31 Cash	1248
Notes Receivable		1200
Interest Revenue		48
(To record collection of note receivable and interest by the bank)
Jul-31 Accounts Receivable	328
Cash		328
(To record NSF check)
Jul-31 Miscellaneous Expense	30
Cash		30
Note: Bank Service charge expense can alternatively be used for Miscellaneous Expense