Question

On August 1, 20X1, the accountant for Western Imports downloaded the company's July 31, 20X1, bank statement from the bank's website. The balance shown on the bank statement was $28,780. The July 31, 20X1, balance in the Cash account in the general ledger was $14,020.

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:

1. An electronic funds transfer for $14,600 from Foncier Ricard, a customer located in France, was received by the bank on July 31.
2. Check 1422 was correctly written and recorded for $1,200. The bank mistakenly paid the check for $1,260.
3. The accounting records indicate that Check 1425 was issued for $69 to make a purchase of supplies. However, examination of the check online showed that the actual amount of the check was for $99.
4. A deposit of $880 made after banking hours on July 31 did not appear on the July 31 bank statement.
5. The following checks were outstanding: Check 1429 for $1,251 and Check 1430 for $143.
6. An automatic debit of $264 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:

1. Prepare a bank reconciliation for the firm as of July 31.
2. Record general journal entries for the items on the bank reconciliation that must be journalized.

Answer 1

Bank Reconciliation Statement
balance as per bank statement			28780
Add:
Check wrongly recorded			60
Deposits in transit				880
Sub total					29720
Less:
Outstanding checks				1394
Adjusted balance as per bank statement		28326
Balance as per Books			14020
Add:
EFT transfer				14600
					28620
Less:
Check wrongly recorded			30
Telephone charges not recorded		264
Adjusted balance as per books			28326
Journal entries
S.no.	Accounts title and explanations		Debit $	Credit $
a.	Cash				14600
	Accounts receivable			14600
	(for EFT transfer)
b.	Supplies account			30
	Cash					30
	(for supplies check wrongly recorded)
c.	Utilities expense			264
	Cash					264
	(for telehone charges not recorded)