Problem 7.1A Bank Reconciliation L.O. 1,3 The cash transactions and cash balances of Banner Limited, for July were as follows: 1. The ledger account for Cash showed a balance at July 31 of $125,568 2. The July bank statement showed a closing balance of $114,828 3. The cash received on July 31 amounted to $16,000. It was left at the bank in the night depository chute after banking hours on July 31 and therefore was not recorded by the bank on the July statement. 4. Also included with the July bank statement was a debit memorandum from the bank for $50 representing service charges for July 5. A credit memorandum enclosed with the July bank statement indicated that a non-interest-bearing note receivable for $4,000 from Rene Manes, left with the bank for collection, had been collected and the proceeds credited to the account of Banner Limited 6. Comparison of the paid checks returned by the bank with the entries in the accounting records revealed that check no. 821 for $519, issued July 15 in payment for office equipment, had been erroneously entered in Banner's records as $915. 7. Examination of the paid checks also revealed that three checks, all issued in July, had not yet been paid by the bank: no. 811 for $314, no. 814 for $625, no. 823 for $175. 8. Included with the July bank statement was a $200 check drawn by Howard Williams, a customer of Banner Limited. This check was marked "NSF" It had been included in the deposit of July 27 but had been charged back against the company's account on July 31. a. Prepare a bank reconciliation for Banner Limited, at July 31. (Record the transactions in the given order. Input all amounts as positive values. Omit the "S" sign in your response BANNER LIMITED Bank Reconciliation July 31 Balance per bank statement, July 31 Add: Deposit in transit 114,828 16,000 $ 130,828 Deduct: Outstanding checks no. 811 no. 814 no. 823 1,114 Adjusted cash balance $ 129,714 $ 125,568 v $ 4,000 Balance per accounting records, July 31 Add: Note receivable collected by bank Check no. 821 for office equipment: Recorded as Actual amount 915 915 519 396 4,396 129,964 $ 50 Deduct: Service charges NSF check, Howard Williams 200 250 Adjusted cash balance (as above) $ 129,714 b. Prepare journal entries in general journal form) to adjust the accounts at July 31. Assume that the accounts have not been closed. (Omit the "$" sign in your response.) Date Debit Credit July 31 General Journal (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select)
