Palmeiro Company maintains a checking account at Marine City Bank. At July 31 selected data from the ledger balance and the bank statement are as follows:

Analysis of the bank data reveals that the credits consist of \(\$ 78,000\) of July deposits and a credit memorandum of \(\$ 2,070\) for the collection of a \(\$ 2,000\) note plus interest revenue of \(\$ 70\). The July debits per bank consist of checks cleared \(\$ 74,700\) and a debit memorandum of \(\$ 40\) for printing additional company checks. You also discover the following errors involving July checks: (1) a check for \(\$ 230\) to a creditor on account that cleared the bank in July was journalized and posted as \(\$ 320\), and (2) a salary check to an employee for \(\$ 255\) was recorded by the bank for \(\$ 155\). The June 30 bank reconciliation contained only two reconciling items: deposits in transit \(\$ 5,000\) and outstanding checks of \(\$ 6,600\).
\section*{Instructions}

(a) Prepare a bank reconciliation at July 31.

(b) Journalize the adjusting entries to be made by Palmeiro Company at July 31. Assume the interest on the note has been accrued.

Transcribed Image Text:

Per Books Cash in Bank Per Bank Balance, July 1 July receipts July credits $17,600 $19,200 82,000 80,070 July disbursements 76,900 July debits 74,740 Balance, July 31 $22,700 $24,530