Question

On July 31, 2020, Crane Company had a cash balance per books of $6,190.00. The statement from Dakota State Bank on that date showed a balance of $7,700.00. A comparison of the bank statement with the Cash account revealed the following facts. 1. The bank service charge for July was $25. 2. The bank collected $1,500 for Keeds Company through electronic funds transfer. 3. The July 31 receipts of $1,200.00 were not included in the bank deposits for July. These receipts were deposited by the company in a night deposit vault on July 31. 4. Company check No. 2480 issued to L. Taylor, a creditor, for $361 that cleared the bank in July was incorrectly entered as a cash payment on July 10 for $316. 5. Checks outstanding on July 31 totaled $1,860.00. 6. On July 31, the bank statement showed an NSF charge of $580 for a check received by the company from W. Krueger, a customer, on account.

Prepare the bank reconciliation as of July 31. (List items that increase cash balance first. Round answers to 2 decimal places, e.g., 1,245.25) CRANE COMPANY Bank Reconciliation For the Month Ended July 31, 2020For the Year Ended July 31, 2020July 31, 2020 Cash Balance Per Bank StatementDeposits in TransitOutstanding ChecksAdjusted Cash Balance Per BankElectronic Funds Transfer ReceivedNSF CheckBank Service ChargeError in Recording Check No.2480 $ LessAdd : Cash Balance Per Bank StatementDeposits in TransitOutstanding ChecksAdjusted Cash Balance Per BankElectronic Funds Transfer ReceivedNSF CheckBank Service ChargeError in Recording Check No.2480 AddLess : Cash Balance Per Bank StatementDeposits in TransitOutstanding ChecksAdjusted Cash Balance Per BankElectronic Funds Transfer ReceivedNSF CheckBank Service ChargeError in Recording Check No.2480 Cash Balance Per Bank StatementDeposits in TransitOutstanding ChecksAdjusted Cash Balance Per BankElectronic Funds Transfer ReceivedNSF CheckBank Service ChargeError in Recording Check No.2480 $ Cash Balance Per BooksDeposits in TransitOutstanding ChecksAdjusted Cash Balance Per BooksElectronic Funds Transfer ReceivedNSF CheckBank Service ChargeError in Recording Check No.2480 $ AddLess : Cash Balance Per BooksDeposits in TransitOutstanding ChecksAdjusted Cash Balance Per BooksElectronic Funds Transfer ReceivedNSF CheckBank Service ChargeError in Recording Check No.2480 LessAdd : Cash Balance Per BooksDeposits in TransitOutstanding ChecksAdjusted Cash Balance Per BooksElectronic Funds Transfer ReceivedNSF CheckBank Service ChargeError in Recording Check No.2480 Cash Balance Per BooksDeposits in TransitOutstanding ChecksAdjusted Cash Balance Per BooksElectronic Funds Transfer ReceivedNSF CheckBank Service ChargeError in Recording Check No.2480 Cash Balance Per BooksDeposits in TransitOutstanding ChecksAdjusted Cash Balance Per BooksElectronic Funds Transfer ReceivedNSF CheckBank Service ChargeError in Recording Check No.2480 Cash Balance Per BooksDeposits in TransitOutstanding ChecksAdjusted Cash Balance Per BooksElectronic Funds Transfer ReceivedNSF CheckBank Service ChargeError in Recording Check No.2480 $

Prepare the necessary adjusting entries at July 31. Date Account Titles and Explanation Debit Credit July 31 (To record receipt of electronic funds transfer) July 31 (To record NSF check) July 31 (To correct error in recording check) July 31 (To record bank service charge)

Answer 1

Answer
Bank Reconciliation Statement:
Balance as per Bank Statement	$     7,700
Additions:
Deposits in transit	$     1,200
	$     8,900
Less:
Outstanding checks	$     1,860
Adjusted Balance as per Bank Statement	$     7,040
Balance as per books	$     6,190
Additions:
EFT collected from customer	$     1,500
	$     7,690
Less:
Service charges	$          25
Error in recording the check (361-316)	$          45
NSF charges nt recorded	$        580
Adjusted Balance as per Books	$     7,040

Journal entry
Date	General Journal	Debit	Credit
Jul-31	Cash	$     1,500
	Account receivable		$     1,500
	(To record electronic fund transfer received)
Jul-31	Account receivable	$        580
	Cash		$        580
	(To record NSF Check)
Jul-31	Account payable	$          45
	Cash		$          45
	(To correct error in recording check)
Jul-31	Bank Service charge	$          25
	Cash		$          25
	(To record bank service charge)