Question
In: Accounting
Harrison Company maintains a checking account at the First National City Bank. The bank provides a...
Harrison Company maintains a checking account at the
First National City Bank. The bank provides a bank statement along
with canceled checks on the last day of each month. The July 2021
bank statement included the following information:
| Balance, July 1, 2021 | $ | 57,428 | |
| Deposits | 180,900 | ||
| Checks processed | (194,010 | ) | |
| Service charges | (45 | ) | |
| NSF checks | (1,900 | ) | |
| Monthly payment on note, deducted directly by bank from
account (includes $220 in interest) |
(4,020 | ) | |
| Balance, July 31, 2021 | $ | 38,353 | |
The company’s general ledger account had a balance of $40,803 at
the end of July. Deposits outstanding totaled $7,700 and all checks
written by the company were processed by the bank except for those
totaling $8,560. In addition, a $3,400 July deposit from a credit
customer was recorded as a $340 debit to cash and credit to
accounts receivable, and a check correctly recorded by the company
as a $45 disbursement was incorrectly processed by the bank as a
$450 disbursement.
Required:
1. Prepare a bank reconciliation for the month of
July.
2. Prepare the necessary journal entries at the
end of July to adjust the general ledger cash account.
Solutions
Expert Solution
| Answer: 1) | |
| Bank Reconciliation statement for the month of July | |
| Balance per bank statement | $38,353 |
| Add: Deposits outstanding | $7,700 |
|
Bank error in recording check ($450 (-) $45) |
$405 |
| $46,458 | |
| Deduct: Checks outstanding | ($8,560) |
| Adjusted cash balance | $37,898 |
|
Add : Error in recording ($3,400 (-) $340) |
$3,060 |
| $43,863 | |
| Deduct:Service charges | ($45) |
| NSF checks | ($1,900) |
| Monthly loan payment | ($4,020) |
| Adjusted cash balance | $37,898 |
| 2) Preparation of journal Entries | |||
| Date | Accounts and Explanation | Debit (in $) | Credit (in $) |
| Cash | $3,060 | ||
| Accounts Receivable | $3,060 | ||
| (To record the error in recording Cash receipts) | |||
| Misc Exp/ Bank Service Charges | $45 | ||
| Accounts Receivable - NSF checks | $1,900 | ||
| Interest Expense | $220 | ||
| Note Payable | $3,800 | ||
| Cash | $5,965 | ||
| (To record credit to cash) | |||
ekkarill92 answered 3 years agoRelated Solutions
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Harrison Company maintains a checking account at the First National City Bank. The bank provides a...
Harrison Company maintains a checking account at the
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bank statement included the following information:
Balance, July 1, 2021
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Deposits
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Service charges
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with canceled checks on the last day of each month. The July 2021
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Service charges
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Harrison Company maintains a checking account at the First
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canceled checks on the last day of each month. The July 2021 bank
statement included the following information:
Balance, July 1, 2021
$
56,803
Deposits
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Checks processed
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Service charges
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NSF checks
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