Fraud, Internal Control, and Cash and Reporting and Analyzing Receivables

Epto Ergo's bank statement from Crypto Bank at July 31, 2020, gives the following information. Balance, July 1 August deposits Checks cleared in July Bank credit memorandum: Interest earned $18,400 71,000 68,678 Bank debit memorandum: Safety deposit box fee Service charge Balance, July 31 $ 25 50 20,692 45 A summary of the Cash account in the ledger for July shows the following: balance, July 1, $18,700; receipts $74,000; disbursements $73,570; and balance, July 31, $19,130. Analysis reveals that the only reconciling items on the June 30 bank reconciliation were a deposit in transit for $4,800 and outstanding checks of $4,500. In addition, you determine that there was an error involving a company check drawn in July: A check for $400 to a creditor on account that cleared the bank in July was journalized and posted for $40. Instructions a) Determine deposits in transit. b) Determine outstanding checks. (Hint: You need to correct disbursements for the check error.) c) Prepare a bank reconciliation at July 31. d) Journalize the adjusting entry(ies) to be made by Epto Ergo at July 31