Question

Bentley Company’s June 30 bank statement and June ledger accounts for cash are summarized below:

BANK STATEMENT
	Checks				Deposits				Balance
Balance, June 1										$	7,750
Deposits during June						$	15,950				23,700
Checks cleared during June		$	16,700								7,000
Bank service charges			27								6,973
Balance, June 30											6,973

Cash (A)
June 1 Balance	7,750	June Checks written	19,250
June Deposits	18,400

Required:

1. Reconcile the bank account. A comparison of the checks written with the checks that have cleared the bank shows outstanding checks of $2,550. A deposit of $2,450 is in transit at the end of June.

2. Prepare the journal entry that should be made as a result of the bank reconciliation. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

3. What is the balance in the Cash account after the reconciliation entries?

4. What is the total amount of cash that should be reported on the balance sheet at June 30?

Answer 1

	1
	Bank Reconciliation, June 30
	Company's Books			Bank statement
	Ending balance per cash account		6900	Ending balance per bank statement		6973
	Additions:			Additions:
				Deposit in Transit	2450
			0			2450
			6900			9423
	Deductions:			Deductions:
	Bank service charge	27		Outstanding checks	2550
			27			2550
	Correct Cash balance		6873	Correct Cash balance		6873
2
	General Journal	Debit	Credit
June 30	No journal entry required
June 30	No journal entry required
June 30	Bank service charge expense	27
	Cash		27
	3
	Cash balance	6873
	4
	Total amount of Cash	6873