On August 2, Northway Hotel receives its bank statement (on the following page). The company deposits its receipts in the bank and makes all payments by check. The debit memo for $37 is for an NSF check written by T. N. Rankin. Check no. 1617 for $72.50, payable to Melville Company (a cred¬

itor), was incorrectly recorded in the checkbook and journal as $27.50.

The balance of the Cash account as of July 31 is $1,482.46. Outstanding checks as of July 31 are; no. 1631, $110; no. 1632, $71.19; no. 1633, $163.20.

The accountant notes that the July 31 deposit of $165.69 did not appear on the bank statement.

Instructions 1. Prepare a bank reconciliation as of July 31, assuming that the debit memos have not been recorded.

2. Record the necessary journal entries.

3. Complete the bank form to determine the adjusted balance of cash.

Instructions for General Ledger Software 1. Prepare a bank reconciliation as of July 31. Errors made by the company or the bank, as well as service charges, must be entered as debit or credit memos.

2. Print the bank reconciliation.

3. Record the necessary journal entries.

4. Print the journal entries.

Transcribed Image Text:

Northway Hotel 410 W. Lang Street Rockford, Illinois 61104 SUMMARY Balance Last Statement $1,153.80 Amount of Checks and Debits $2,105.91 Number of Checks 14. Amount of Deposits and Credits $2,528.17 Number of Deposits Balance This Statement 7 $1,576.06 ACCOUNT NO. 761-145-792 STATEMENT DATE July 1-31, 19- CHECKS CHECKS CHECK NUMBER DATE POSTED AMOUNT CHECK NUMBER DATE POSTED AMOUNT OTHER DEBITS 1617 7-03 72.50 1624 7-08 120.00 1618 7-03 167.00 1625 7-09 429.60 1619 7-03 124.20 1626 7-12 37.40 1620 7-05 137.20 1627 7-14 38.49 1621 7-06 236.25 1628 7-22 182.71 1622 7-06 159.89 1629 7-25 96.87 1623 7-08 244.50 1630 7-26 19.20 OTHER DEBITS DM NSF check DM Service charge DESCRIPTION DEPOSITS/ DEPOSITS DATE POSTED AMOUNT DATE POSTED AMOUNT OTHER CREDITS 7-03 491.50 7-15 291.76 7-06 415.72 7-18 142.90 7-09 439.16 7-28 368.93 7-11 378.20 DATE POSTED AMOUNT 7-22 37.00 7-31 3.10