Question

On August 1, 2019, the accountant for Western Imports downloaded the company's July 31, 2019, bank statement from the bank's Website. The balance shown on the bank statement was $28,860. The July 31, 2019, balance in the Cash account in the general ledger was $13,202.

Jenny Irvine, the accountant for Western Imports, noted the following differences between the bank's records and the company's Cash account in the general ledger:

An electronic funds transfer for $15,400 from Foncier Ricard, a customer located in France, was received by the bank on July 31.

Check 1422 was correctly written and recorded for $1,200. The bank mistakenly paid the check for $1,250.

The accounting records indicate that Check 1425 was issued for $66 to make a purchase of supplies. However, examination of the check online showed that the actual amount of the check was for $96.

A deposit of $800 made after banking hours on July 31 did not appear on the July 31 bank statement.

The following checks were outstanding: Check 1429 for $1,259, and Check 1430 for $151.

An automatic debit of $272 on July 31 from CentralComm for telephone service appeared on the bank statement but had not been recorded in the company's accounting records.

Required:

Prepare a bank reconciliation for the firm as of July 31.

Record general journal entries for the items on the bank reconiliation that must be journalized.

Analyze:
What effect on total expenses occurred as a result of the general journal entries recorded?

Bank Rec

General Journal

Analyze

Prepare a bank reconciliation for the firm as of July 31.

	WESTERN IMPORTS Bank Reconciliation Statement July 31, 2019 Balance on bank statement Additions: 0 $0 Deductions: Total deductions 0 Adjusted bank balance $0 Balance in books Additions: $0 Deductions: 0 Adjusted bank balance $0

General Journal

Analyze

Record general journal entries for the items on the bank reconiliation that must be journalized. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

Record the EFT received on account.

Note: Enter debits before credits.

	Date General Journal Debit Credit July 31, 2019

Record the entry to correct for check 1422.

Note: Enter debits before credits.

Date General Journal Debit Credit July 31, 2019 Record the entry to correct for check 1425. Note: Enter debits before credits. Date General Journal Debit Credit July 31, 2019 Record the deposit in transit. Note: Enter debits before credits. Date General Journal Debit Credit July 31, 2019 Record the outstanding checks. Note: Enter debits before credits. Date General Journal Debit Credit July 31, 2019 Record the online payment. Note: Enter debits before credits. Date General Journal Debit Credit July 31, 2019 What effect on total expenses occurred as a result of the general journal entries recorded? Total expenses will by

Answer 1

WESTERN IMPORTS
Bank Reconciliation statement
31-Jul-19
Balance on bank statement		$ 28,860
Additions
Bank mistake for customer payment	$        50
Deposit in transit	$     800
Total additions		$        850
		$ 29,710
Deduction
Outstanding checks
#1429	$ 1,259
#1430	$     151
Total deductions		$    1,410
Adjusted bank balance		$ 28,300
Balance in books		$ 13,202
Additions
Elctronic fund received		$ 15,400
		$ 28,602
Deductions
Mistake in check 1425 recorded	$        30
Telephone service expenses	$     272
Total deductions		$        302
Adjusted balance		$ 28,300

Journal entries

1	Cash	$ 14,700
	Accounts receivable		$ 14,700
2	No Journal entry required
3	Supplies	$          30
	cash		$          30
4	No Journal entry required
5	No Journal entry required
6	Telephone expenses	$        265
	Cash		$        265

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