Question

On July 31, 2020, Sandhill Co. had a cash balance per books of $6,340.00. The statement from Dakota State Bank on that date showed a balance of $7,890.80. A comparison of the bank statement with the Cash account revealed the following facts.

1.		The bank service charge for July was $21.00.
2.		The bank collected $1,720 for Sandhill Co. through electronic funds transfer.
3.		The July 31 receipts of $1,397.30 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 $374.00 that cleared the bank in July was incorrectly entered as a cash payment on July 10 for $347.00.
5.		Checks outstanding on July 31 totaled $2,051.10.
6.		On July 31, the bank statement showed an NSF charge of $775.00 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 balance as per bank & books first. Round answers to 2 decimal places, e.g. 52.75.)

Answer 1

(a)

SANDHILL COMPANY

Bank Reconciliation

July 31, 2020

                                                                                                                                                                     

          Cash balance per bank statement.................................................                                       $7,890.80

          Add:   Deposits in transit............................................................                                         1,397.30

                                                                                                                                                       9,288.10

          Less:  Outstanding checks...........................................................                                        2,051.10

          Adjusted cash balance per bank..................................................                                       $7,237.00

          Cash balance per books................................................................                                       $6,340.00

          Add:   Electronic funds

                         transfer received...........................................................                                         1,720.00

8,060.00

          Less:  NSF check.........................................................................            $775.00                             

                         Error in recording check No. 2480................................ 27.00                             

                         Bank service charge......................................................               21.00               823.00

          Adjusted cash balance per books.................................................                                       $7,237.00