Hodges Playground, Inc. has lost some of its accounting records regarding its July cash receipts and payments. It reconciled its June 30, 2015 bank statement on July 2 and made the related adjusting entries at that time. The company has not reconciled its July 31, 2015 bank statement. It provides you with the following information on August 3:

	7/31/2015
Cash account balance	$3,278
Bank statement balance	7,010
Deposits in transit	564
Outstanding checks (cleared next month)	920
Bank service charge	44
Bank chargesNSF checks returned	380
Collection by bank of company's notes receivable	4,000

In addition, it was found that a July check for $320 (included in the July 31 bank statement) to purchase office supplies was erroneously recorded in the checkbook for $120.

Required:

1. Prepare a bank reconciliation for the month ended July 31, 2015.
2. Prepare the correcting entry for the month ended July 31, 2015.

ANSWER