On July 31, 1996, Lori Company had a cash balance per books of \(\$ 6,815.00\). The statement from Tri-County Bank on that date showed a balance of \(\$ 7,076.00\). A comparison of the bank statement with the cash account revealed the following facts:

1. The bank service charge for July was \(\$ 25\).

2. The bank collected a note receivable of \(\$ 1,200\) for Lori Company on July 15 , plus \(\$ 48\) of interest. The bank made a \(\$ 10\) charge for the collection. Lori has not accrued any interest on the note.

3. The July 31 receipts of \(\$ 1,820\) were not included in the bank deposits for July. These receipts were deposited by the company in a night deposit vault on July 31.

4. Company check No. 2480 issued to J. Brokaw, a creditor, for \(\$ 492\) that cleared the bank in July was incorrectly entered in the cash payments journal on July 10 for \(\$ 429\).

5. Checks outstanding on July 31 totaled \(\$ 1,481\).

6. On July 31 , the bank statement showed an NSF charge of \(\$ 550\) for a check received by the company from R. Close, a customer, on account.

\section*{Instructions}

(a) Prepare the bank reconciliation as of July 31.

(b) Prepare the necessary adjusting entries at July 31.