You are auditing general cash for the Pittsburg Supply Company for the fiscal year July 31, 2024. The client has not prepared the July 31 bank reconciliation. After a brief discussion with the owner, you agree to prepare the reconciliation, with assistance from one of Pittsburg Supplys clerks. You obtain the following information (amounts are in thousands):

General Ledger Bank Statement

(000) (000)

Beginning Balance 7/1/24 $ 4,611 $ 5,753

Deposits $25,056

Cash receipts journal $25,456

Checks cleared ($23,615)

Cash disbursements journal ($21,811)

July bank service charge ($87)

Note due to bank paid ($6,100)

Nonsufficient check fee ($311)

Ending balance 7/31/2024 $8,256 $696

From the June 30, 2024 Bank Reconciliation

Information in General Ledger and Bank Statement

Balance per bank $5,753

Deposits in transit $600

Outstanding checks $1,742

Balance per books $4,611

Additional Information:

1. Checks that were outstanding on June 30 totaling $1,692, cleared the bank in July.
2. Checks that were recorded in the July disbursements journal totaling $20,467, cleared the bank in July.
3. A check for $1,060 cleared the bank but had not been recorded by Pittsburgh in the cash disbursements journal in July. It was for an acquisition of inventory. Pittsburgh Supply uses the periodic inventory method.
4. A check for $396 was charged to Pittsburgh Supply but had been written on a different companys bank account.
5. Deposits in the bank statement included $600 from June and $24,456 from July.
6. The bank charged Pittsburgh Supplys account for a nonsufficient check totaling $311. Pittsburghs credit manager concluded that the customer intentionally closed its account, and the owner left the city. The check was turned over to a collection agency.
7. A note for $5,800, plus interest, was paid directly to the bank in July by Pittsburg under an agreement signed 4 months ago. The note payable was recorded at $5,800 on Pittsburg Supplys books.

REQUIRED:

1. Prepare a bank reconciliation.
2. Prepare all proposed adjusting journal entries for Pittsburgh to use to update its Cash balance as of July 31, 2024.
3. Determine the cash balance that should appear on the July 31, 2024 financial statements of Pittsburgh Supply.

5. Explain the CASH and EQUIVALENTS disclosure in the 2020 financial disclosures of McDonalds Corporation.