Inc \'s bank statement from Western Bank at August 31, 2018, shows the fellowing
ID: 2393712 • Letter: I
Question
Inc 's bank statement from Western Bank at August 31, 2018, shows the fellowing information Balance, August August deposits Cheques cleared in August Bank crede for interest earned not yet accrued Bank debit for safety deposit bex fee Bank service charge Balance, August 31 $15,996 2,900 (68,082) 45 (30) (60) $20,769 A summary of the Cash account in the ledger for August shows the fol balance, August 31, $20,485. Analysis reveals that wing: Recondled cesh biolance, August 1, $15,875, cesh receipts deposited $77,500, cheque disbursements $72,890; and unreconaled cesh the only reconciling toms on the July 31 bank reconoliztisn were a depost in transt for $4,400 and outstandng cheques of $4,521. In aodition, you determine f i there was an errer involving a company cheque drawn in August: A cheque fer $400 to a creditor on account that cleared the bank in August was journalized and posted fer 540. Cakulate deposits in transit at Augst 3i Deposits in transt Calculate the amount of outstanding cheques at August 3. Hine You need to correct disbursements for the cheque eror Outstanding chees anow Las Prepare a bank reconcliation at August 31. Listtes that increase balance as per baak & books first.)Explanation / Answer
Deposits in transit in Aug 31: Deposits in transit in July31: 4400 Add: Cheques depsoited in Aug 77500 Less: Checks cleared in bank 72900 Deposit in transit in Aug 31 9000 Outstanding Checks in July31 4521 Add: Checks issued (72890+360) 73250 Less: Checks cleared in Aug 68082 Outstanding checks in Aug 31 9689 Bank Reconciliation Statement Balance as per bank statement 20769 Add: Deposit in transit 9000 29769 Less: Outstanding checks 9689 Adjusted balance as per Bank stt. 20080 Balance as per books 20485 Add: Interest allowed 45 20530 Less: Safety deposit fees 30 Less: Service charges 60 Less: Error in recording check 360 450 20080 Journal entries: Cash account Dr. 45 Interest revenue 45 Misc expense Account Dr. 30 Cash account 30 Misc expense AccountDr. 60 Cash account 60 Accounts payable Account Dr. 360 Cash account 360