Werth Inc.s bank statement from Hometown Bank at August 31, 2014, gives the following information. A summary

Werth Inc.’s bank statement from Hometown Bank at August 31, 2014, gives the following information.

A summary of the Cash account in the ledger for August shows the following: balance, August 1, $18,700; receipts $74,000; disbursements $73,570; and balance, August 31, $19,130. Analysis reveals that the only reconciling items on the July 31 bank reconciliation were a deposit in transit for $4,800 and outstanding checks of $4,500. In addition, you determine that there was an error involving a company check drawn in August: A check for $400 to a creditor on account that cleared the bank in August was journalized and posted for $40.

Instructions
(a) Determine deposits in transit.
(b) Determine outstanding checks.
(c) Prepare a bank reconciliation at August 31.
(d) Journalize the adjusting entry (ies) to be made by Werth Inc. at August31.

Transcribed Image Text:

Balance, August 1 August deposits Checks cleared in August Bank credit memorandum: $18,400 71,000 68,678 Bank debit memorandum: Safety deposit box fee 25 Service charge Balance, August 31 50 20,692 Interest earned 45