Bank Reconciliation

On July 31, Arthur Company's Cash in Bank account had a balance of $8,112.62.

On that date, the bank statement indicated a balance of $10,170.62.

A comparison of returned checks and bank advices revealed the following:

1. Deposits in transit July 31 amounted to $3,316.12.
2. Outstanding checks July 31 totaled $1,251.12.
3. The bank erroneously charged a $215.00 check of Solomon Company against the Arthur bank account.
4. A $15 bank service charge has not yet been recorded by Arthur Company.
5. Arthur neglected to record $4,000.00 borrowed from the bank on a ten percent six-month note. The bank statement shows the $4,000.00 as a deposit.
6. Included with the returned checks is a memo indicating that J. Martin's check for $610.00 had been returned NSF. Martin, a customer, had sent the check to pay an account of $660.00 less a $50 discount.
7. Arthur Company recorded a $107.00 payment for repairs as $1,070.00.

Required

a. Prepare a bank reconciliation for Arthur Company at July 31.

b. Prepare the journal entry (or entries) necessary to bring the Cash in Bank account into agreement with the reconciled cash balance on the bank reconciliation.

Note:Do not round answers - enter using two decimal places, when needed.

ARTHUR COMPANY

Bank Reconciliation

July 31Answer

Deposits not credited by bank

Ending balance from bank statement

Outstanding checks

Proceeds of note

Service charge

Reconciled cash balance

Answer

Balance from general ledgerAnswer

Add:Answer

Deposits not credited by bank

Ending balance from bank statement

Outstanding checks

Proceeds of note

Service charge

Reconciled cash balance

Answer

Add:Answer

Deposits not credited by bank

Ending balance from bank statement

Outstanding checks

Proceeds of note

Service charge

Reconciled cash balance

Answer

Add:Bank error- Solomon Company checkAnswer

charged against Arthur Company's accountAnswer

Answer

Answer

Answer

Answer

Less:Answer

Deposits not credited by bank

Ending balance from bank statement

Outstanding checks

Proceeds of note

Service charge

Reconciled cash balance

Answer

Less:Answer

Deposits not credited by bank

Ending balance from bank statement

Outstanding checks

Proceeds of note

Service charge

Reconciled cash balance

Answer

Less:NSF CheckAnswer

Answer

Deposits not credited by bank

Ending balance from bank statement

Outstanding checks

Proceeds of note

Service charge

Reconciled cash balance

Answer

Answer

Deposits not credited by bank

Ending balance from bank statement

Outstanding checks

Proceeds of note

Service charge

Reconciled cash balance

Answer

GENERAL JOURNALDateDescriptionDebitCreditJuly31Answer

Accounts Receivable

Cash in Bank

Miscellaneous Expense

Notes Payable

Repairs Expense

Sales Discounts

Answer

Answer

Answer

Accounts Receivable

Cash in Bank

Miscellaneous Expense

Notes Payable

Repairs Expense

Sales Discounts

Answer

Answer

To record proceeds of note.31Answer

Accounts Receivable

Cash in Bank

Miscellaneous Expense

Notes Payable

Repairs Expense

Sales Discounts

Answer

Answer

Answer

Accounts Receivable

Cash in Bank

Miscellaneous Expense

Notes Payable

Repairs Expense

Sales Discounts

Answer

Answer

To correct recording of check.31Answer

Accounts Receivable

Cash in Bank

Miscellaneous Expense

Notes Payable

Repairs Expense

Sales Discounts

Answer

Answer

Answer

Accounts Receivable

Cash in Bank

Miscellaneous Expense

Notes Payable

Repairs Expense

Sales Discounts

Answer

Answer

To record service charge.31Answer

Accounts Receivable

Cash in Bank

Miscellaneous Expense

Notes Payable

Repairs Expense

Sales Discounts

Answer

Answer

Answer

Accounts Receivable

Cash in Bank

Miscellaneous Expense

Notes Payable

Repairs Expense

Sales Discounts

Answer

Answer

Cash in BankAnswer

Answer

To reclassify NSF check as an account receivable.