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P8-6B Betterdorf Company's bank statement from the National Bank at August 31, 2003, shows the following information: $17,400 Balance, August 1 August deposits 72,000
P8-6B Betterdorf Company's bank statement from the National Bank at August 31, 2003, shows the following information: $17,400 Balance, August 1 August deposits 72,000 Cheques cleared in August Bank credit memorandum: 69,660 1088 Collection of note receivable, $5,000 5,090 45 25 plus $90 interest Other interest earned Bank debit memorandum: Safety deposit box rent Balance, August 31 24,850 A summary of the Cash account in the ledger for August shows the following: Balance, August 1, $16,900; cash receipts $77,000; cash disbursements $73,570. An analysis reveals that the only rec- onciling items on the July 31 bank reconciliation were a deposit in transit for $4,000 and outstand- ing cheques of $4,500. The deposit in transit was the first deposit recorded by the bank in August. In addition, you determine that there were two errors involving company cheques drawn in August: (1) A cheque for $400 to a creditor on account that cleared the bank in August was journalized and posted for $40. (2) A salary cheque for $275 to an employee was recorded by the bank for $572. Instructions (a) Determine the unadjusted Cash balance at August 31. (b) Prepare a bank reconciliation at August 31. (c) Journalize the correcting entries to be made by Betterdorf Company at August 31. Assume the interest on the note has been accrued by the company.
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