Palmeiro Company maintains a checking account at Marine City Bank. At July 31 selected data from the

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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:

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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.

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Financial Accounting Tools For Business Decision Making

ISBN: 9780471169192

1st Edition

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

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