Question

The following information pertains to Vaughn Video Company. 1. Cash balance per bank, July 31, $7,983. 2. July bank service charge not recorded by the depositor $36. 3. Cash balance per books, July 31, $8,004. 4. Deposits in transit, July 31, $1,860. 5. Bank collected $1,260 note for Vaughn in July, plus interest $44, less fee $28. The collection has not been recorded by Vaughn, and no interest has been accrued. 6. Outstanding checks, July 31, $599.

Prepare a bank reconciliation at July 31. (List items that increase cash balance first.) VAUGHN VIDEO COMPANY Bank Reconciliation For the Month Ended July 31For the Year Ended July 31July 31 Collection of note receivableOutstanding checksDeposits in transitCash balance per bank statementAdjusted cash balance per bankBank service charge $ LessAdd : Outstanding checksCollection of note receivableBank service chargeCash balance per bank statementAdjusted cash balance per bankDeposits in transit LessAdd : Bank service chargeDeposits in transitCash balance per bank statementOutstanding checksAdjusted cash balance per bankCollection of note receivable Outstanding checksBank service chargeDeposits in transitAdjusted cash balance per bankCollection of note receivableCash balance per bank statement $ Deposits in transitOutstanding checksCollection of note receivableAdjusted cash balance per booksBank service chargeCash balance per books $ LessAdd : Bank service chargeCollection of note receivableCash balance per booksAdjusted cash balance per booksOutstanding checksDeposits in transit AddLess : Bank service chargeAdjusted cash balance per booksDeposits in transitOutstanding checksCash balance per booksCollection of note receivable Collection of note receivableCash balance per booksBank service chargeAdjusted cash balance per booksOutstanding checksDeposits in transit $ SHOW LIST OF ACCOUNTS

Journalize the adjusting entries at July 31 on the books of Vaughn Video Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit July 31 (To record the collection of the note.) July 31 (To record the bank service charge.)

Answer 1

Prepare a bank reconciliation at July 31. (List items that increase cash balance first.) VAUGHN VIDEO COMPANY Bank Reconciliation For the Month Ended July 31 Cash balance per bank statement $7983 Add : Deposits in transit 1860 9843 Less : Outstanding checks -599 Adjusted cash balance per bank $9244 Cash balance per books $8004 Add : Collection of note receivable (1260+44-28) 1276 9280 Less : Bank service charge -36 Adjusted cash $9244

Journalize the adjusting entries at July 31 on the books of Vaughn Video Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit July 31 Cash 1276 Bank Service charge 28 Interest revenue 44 Notes receivable 1260 (To record the collection of the note.) July 31 Bank service charge 36 Cash 36 (To record the bank service charge.)