Bank reconciliation and entries

The cash account for Stone Systems at July $31,20$Y$5,$ indicated a balance of $$9,725.$ The bank statement indicated a balance of $$12,450$ on July $31,20$Y$5.$ Comparing the bank statement and the accompanying canceled checks and memos with the records reveals the following reconciling items:

Checks outstanding totaled $$4,480.$

A deposit of $$4,670,$ representing receipts of July $31,$ had been made too late to appear on the bank statement.

The bank had collected $$2,430$ on a note left for collection. The face of the note was $$2,300.$

A check for $$700$ returned with the statement had been incorrectly recorded by Stone Systems as $$770.$ The check was for the payment of an obligation to Holland Co$.$ for the purchase of office supplies on account.

A check drawn for $$500$ had been incorrectly charged by the bank as $$50.$

Bank service charges for July amounted to $$35.$

Required:

Question Content Area

$1.$ Prepare a bank reconciliation.

Stone Systems

Bank Reconciliation

July $31,20$Y$5$

Line Item Description Amount Amount

Cash balance according to bank statement blank $Cash balance according to bank statement

Add: Deposit in transit on July $31$

$Deduct: Outstanding checks

$-$ Select $-$ blank

Total deductions blank Total deductions

Adjusted balance blank $Adjusted balance

Cash balance according to company's records blank $Cash balance according to company's records

Adjustments: blank blank

$$-$ Select $-$

$-$ Select $-$ blank

Total additions blank Total additions

blank $-$ Select $-$

Adjusted balance blank $Adjusted balance