The following information pertains to Ghose Company.
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Cash balance per bank, July 31, $8,020.
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July bank service charge not recorded by the depositor $41.
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Cash balance per books, July 31, $8,056.
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Deposits in transit, July 31, $3,392.
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Note for $2,692 collected for Ghose in July by the bank, plus interest $39 less fee $23. The collection has not been recorded by Ghose, and no interest has been accrued.
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Outstanding checks, July 31, $689.
(a) Prepare a bank reconciliation at July 31, 2012.
(b) Journalize the adjusting entries at July 31 on the books of Ghose Company.
2 Answers
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(a) Prepare a bank reconciliation at July 31, 2012.
Cash balance per bank, July 31, $8,020
add Deposits in transit, $3,392
less Outstanding checks, July 31, $689
Adjusted bal. per bank $10,723
Cash balance per books, July 31, $8,056
less bank service charge $41
add Note collected $2,692
add interest collected $39
less bank fee $23
Adjusted bal. per books $10,723
(b) Journalize the adjusting entries at July 31 on the books of Ghose Company.
Dr Cash $2,692
Cr Notes receivable $2,692
Dr Cash $39
Cr Interest revenue $39
Dr Miscellaneous expense $64
Cr Cash $64
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[a] Prepare a BANK RECONCILIATION at July 31, 2012.
[Cash balance per bank statement] [$8,020]
ADD [Deposits in transit] [$3,392]= [$11,412]
LESS [Outstanding checks] [$689]
[Adjusted cash balance per bank] [$10,723]
[Cash balance per books] [$8,056]
ADD [Collection of note receivable] [$2,692+$39-$23= $2,708]=[$10,764]
LESS [Bank service charge] [$41]
[Adjusted cash balance per books] [$10,723]
(b) Journalize the adjusting entries at July 31 on the books of Ghose Company.
July 31st:
Debit [Cash] [$10,764]
Debit [Miscellaneous Expense] [$23]
Credit [Notes Receivable] [$2,692]
Credit [Interest Revenue] [$ 39]
(To record collection of note receivable by bank)
July 31st:
Debit [Miscellaneous Expense] [$ 41]
Credit [Cash] [$ 41]
(To record bank service charge)
