Question

Sunshine Interiors deposits all Coins, currency (paper money), checks, money orders, and money on deposit that is available for unrestricted withdrawal from banks and other financial institutions.cash receipts each Wednesday and Friday in a night depository, after banking hours. The data required to reconcile the A summary of all transactions mailed to the depositor or made available online by the bank each month.bank statement as of July 31 have been taken from various documents and records and are reproduced as follows. The sources of the data are printed in capital letters. All checks were written for payments on account.

BANK RECONCILIATION FOR PRECEDING MONTH (DATED JUNE 30):
Cash balance according to bank statement	$9,422.80
Add deposit of June 30, not recorded by bank	780.80
	$10,203.60

Deduct outstanding checks:
No. 580	$310.10
No. 602	85.50
No. 612	92.50
No. 613	137.50		625.60
Adjusted balance			$9,578.00
Cash balance according to company's records			$9,605.70
Deduct bank service charges			27.70
Adjusted balance			$9,578.00
CASH ACCOUNT:
Balance as of July 1			$ 9,578.00
CASH RECEIPTS FOR MONTH OF JULY			6,465.42

DUPLICATE DEPOSIT TICKETS:
Date and amount of each deposit in July:
Date		Amount		Date		Amount		Date		Amount
July 2		$569.50		July 12		$580.70		July 23		$ 713.45
5		701.80		16		600.10		26		601.50
9		819.24		19		701.26		31		1,177.87

CHECKS WRITTEN:
Number and amount of each check issued in July:
Check No.		Amount		Check No.		Amount		Check No.		Amount
614		$243.50		621		$309.50		628		$837.70
615		350.10		622		Void		629		329.90
616		279.90		623		Void		630		882.80
617		395.50		624		707.01		631		1,081.56
618		435.40		625		158.63		632		325.40
619		320.10		626		550.03		633		310.08
620		238.87		627		381.73		634		241.71
Total amount of checks issued in July										$8,379.42

Click here to see JUNE BANK STATEMENT.

Required:

1. Prepare a bank reconciliation as of July 31. If errors in recording deposits or checks are discovered, assume that the errors were made by the company. Assume that all deposits are from cash sales. All checks are written to satisfy accounts payable. When required, enter amounts in dollars and cents.

2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. When required, enter amounts in dollars and cents. For a compound transaction, if an amount box does not require an entry, leave it blank.

3. What is the amount of Cash that should appear on the balance sheet as of July 31?
$

4. Assume that a canceled check for $180 has been incorrectly recorded by the bank as $1,800. Select how the error would be included in a bank reconciliation and how it should be corrected.

Treatment
To correct

Answer 1

Answer 1.
SUNSHINE INTERIORS
Bank Recocilation
JULY 31, 20Y0
Bank's Cash Balance			Company's Cash Balance
Per Bank Statement		11,601.41	Per General Ledger		7,664.00
Add:			Add:
Deposit of Sep 30, not recorded by bank		1,177.87	Error in recording check No. 627 - ($381.73 - $318.73)	63.00
			Error in recording Deposits - ($731.45 - $713.45)	18.00
			Proceeds of Notes collected by bank	4,000.00
			Interest Collected	160.00	4,241.00
		12,779.28			11,905.00
Less:			Less:
Outstanding Checks:			Bank Service Charges	(36.00)
Chq # 613	(137.50)		NSF Check	(375.00)	(411.00)
Chq # 628	(837.70)
Chq # 633	(310.08)	(1,285.28)
Bank Balance after Reconcilation		11,494.00	Company Balance per Reconcilation		11,494.00

Answer 2.
Journal Entry
Date	Particulars	Dr. Amt.	Cr. Amt.
31-Jul	Cash	4,160.00
	Notes Receivables		4,000.00
	Interest Revenue		160.00
	(To record note collection)
31-Jul	Accounts Receivable	375.00
	Cash		375.00
	(To Charge account for NSF check plus fee)
31-Jul	Cash	63.00
	Accounts Payable		63.00
	(To correct an entry error - Chk # 627)
31-Jul	Cash	18.00
	Accounts Receivable		18.00
	(To correct an entry error of deposits)
31-Jul	Bank Charges	36.00
	Cash		36.00
	(To record the bank service charges)
No entry is Recorded for
1	Deposit in Transit
2	Outstanding Checks
3	Bank errors
Answer 3.
Cash shown in Balance Sheet on Jul-31		11,494.00
Answer 4.
In Bank Reconciliation:
Cash Balance as per Bank		XXX
Add: Error in recording Chk - ($1,800 - $180)		1,620.00
Bank Balance after Reconcilation		XXX
No Journal Entry will be passed in Company Records.