Exercise 7-15 On August 31, 2021, Blossom Company had a cash balance per its books of $26,490. The bank statement on that date showed Cash account revealed the following. balance of $17,370. A comparison of the bank statement with the 1. The August 31 deposit of $17,310 was not included on the August bank statement. 2. The bank statement shows that Blossom received EFT deposits from customers on account totalling $2,410 in August. Blossom has not recorded any of these amounts. 3. Cheque #673 for $1,480 was outstanding on July 31. It did not clear the bank account in August. All of the cheques written in August have cleared the bank by August 31, except for cheque #710 for $2,020, and #712 for $2,640. 4. The bank statement showed on August 29 an NSF charge of $314 for a cheque issued by R. Dubai, a customer, in payment of their account. This amount included an $12 service charge by Blossom's bank. The company's policy is to pass on all NSF service charges to the customer. 5. Bank service charges of $28 were included on the August statement. 6. The bank recorded cheque #705 for $124 as $142. The cheque had been issued to pay for freight out on a sale. Blossom had correctly recorded the cheque. Prepare a bank reconciliation at August 31. (List items that increase balance as per bank & books first.) Prepare the necessary adjusting entries on August 31. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Aug. 31 (To record electronic receipt from customer on account) Aug. 31 (To record NSF cheque & bank service charge expense) Blue Spruce Spa shows a general ledger balance for the Cash account of $3,992.85 on June 30 and the bank statement as of that date indicates a balance of $4,160.00. When the statement was compared with the cash records, the following facts were determined: 1. There were bank service charges for June of $29.00. 2. A bank memo stated that Bao Dai's note for $902.00 and interest of $40.00 had been collected on June 29, and the bank had charged $4.50 for the collection. Any interest revenue has not been accrued. 3. Deposits in transit June 30 were $2,896.00. 4. Cheques outstanding on June 30 totalled $2,132.05. 5. On June 29, the bank had charged Blue Spruce Spa's account for a customer's NSF cheque amounting to $459.20. 6. A customer's cheque received as a payment on account of $86.00 had been entered as $62.00 in the cash receipts journal by Blue Spruce Spa on June 15. 7. Cheque no. 742 in the amount of $487.00 had been entered in the books as $423.00, and cheque no. 747 in the amount of $54.20 had been entered as $576.00. Both cheques were issued as payments on account. 8. In May, the bank had charged a $25.50 Wella Spa cheque against the Blue Spruce Spa account. The June bank statement indicated that the bank had reversed this charge and corrected its error Prepare a bank reconciliation at June 30. (List items that increase balance as per bank & books first. Round answers to 2 decimal places, e.g. 52.75.) Prepare any journal entries that are needed to adjust the Cash account at June 30. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Round answers to 2 decimal places, e.g. 52.75.) Date Account Titles and Explanation Debit Credit June 30 (To correct error and record cash receipts) June 30 (To record NSF cheque and other cash payments)
