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On August 31, 2021, Clark Company had a cash balance per its books of $26,030. The bank statement on that date showed a balance of
On August 31, 2021, Clark Company had a cash balance per its books of $26,030. The bank statement on that date showed a balance of $17,100. A comparison of the bank statement with the Cash account revealed the following.
- The August 31 deposit of $17,050 was not included on the August bank statement.
- The bank statement shows that Clark received EFT deposits from customers on account totaling $2,050 in August. Clark has not recorded any of these amounts.
- Cheque #673 for $1,490 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 $2,550, and #712 for $2,480.
- The bank statement showed on August 29 an NSF charge of $416 for a cheque issued by R. Dundee, a customer, in payment of their account. This amount included an $11 service charge by Clark's bank.
- Bank service charges of $25 were included on the August statement.
- The bank recorded cheque #705 for $189 as $198. The cheque had been issued to pay for freight out on a sale. Clark had correctly recorded the cheque.
Instruction: Prepare a bank reconciliation on August 31 and relevant journal entries
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