Bank Reconciliation and Entries

Sunshine Interiors deposits all cash receipts each Wednesday and Friday in a night depository, after banking hours. The data required to reconcile the bank statement as of July 31 have been taken from various documents and records and are reproduced as follows. The sources of the data are printed in capital letters. All checks were written for payments on account.

BANK RECONCILIATION FOR PRECEDING MONTH (DATED JUNE 30):
Cash balance according to bank statement	$9,422.80
Add deposit of June 30, not recorded by bank	780.80
	$10,203.60

Deduct outstanding checks:
No. 580	$310.10
No. 602	85.50
No. 612	92.50
No. 613	137.50		625.60
Adjusted balance			$9,578.00
Cash balance according to company's records			$9,605.70
Deduct bank service charges			27.70
Adjusted balance			$9,578.00
CASH ACCOUNT:
Balance as of July 1			$ 9,578.00
CASH RECEIPTS FOR MONTH OF JULY			6,465.42

DUPLICATE DEPOSIT TICKETS:
Date and amount of each deposit in July:
Date		Amount		Date		Amount		Date		Amount
July 2		$569.50		July 12		$580.70		July 23		$ 713.45
5		701.80		16		600.10		26		601.50
9		819.24		19		701.26		31		1,177.87

CHECKS WRITTEN:
Number and amount of each check issued in July:
Check No.		Amount		Check No.		Amount		Check No.		Amount
614		$243.50		621		$309.50		628		$837.70
615		350.10		622		Void		629		329.90
616		279.90		623		Void		630		882.80
617		395.50		624		707.01		631		1,081.56
618		435.40		625		158.63		632		325.40
619		320.10		626		550.03		633		310.08
620		238.87		627		381.73		634		241.71
Total amount of checks issued in July										$8,379.42

Click here to see JUNE BANK STATEMENT.

Required:

1. Prepare a bank reconciliation as of July 31. If errors in recording deposits or checks are discovered, assume that the errors were made by the company. Assume that all deposits are from cash sales. All checks are written to satisfy accounts payable. When required, enter amounts in dollars and cents.

Sunshine Interiors
Bank Reconciliation
July 31, 20Y5
Cash balance according to bank statement		$
	$
Adjusted balance		$
Cash balance according to company's records		$
	$
	$
Adjusted balance		$

2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. When required, enter amounts in dollars and cents. For a compound transaction, if an amount box does not require an entry, leave it blank.

a. 20Y5 July 31
b. July 31

3. What is the amount of Cash that should appear on the balance sheet as of July 31? $

4. Assume that a canceled check for $180 has been incorrectly recorded by the bank as $1,800. Select how the error would be included in a bank reconciliation and how it should be corrected.

Treatment
To correct

JULY BANK STATEMENT: PAGE 1 MEMBER FDIC ACCOUNT NUMBER FROM 7/01/20YB BALANCE AMERICAN NATIONAL BANK OF DETROIT 7/31/20Y8 9,422 80 6,086.38 7,658.74 TO DETROIT, MI 48201-2500 (313) 933-8547 9 DEPOSITS 20 WITHDRAWALS SUNSHINE INTERIORS 4 OTHER DEBITS AND CREDITS 3,749.OOCR NEW BALANCE 11,601.41 07/ol 07/03 07/06 No.580 310.10 No.612 No.602 No.615 350.10 No.616 279.90 No.61 395. No.619 20.10 No.620 238.87 No.621 309.50 No.624 07.01 No.623 158.63 No.6 No.62 No.630 882.80 No.631 1,081.56 N8F 375.00 No.632 25.40 No.634 241.71 780.80 569.50 701.80 819.24 580.70 M8 4,000.00 M8 160.00 600.10 9,801.00 10,041.50 10,113.30 10,101.64 10,123.37 13,106.86 12,558.20 12,509.6Y 10,170.31 10,304.46 11,035.91 11,637.41 11,601.41 92.50 85.50 No.614 243.50 50 No.618 435.40 07/13 07/14 07/14 26 550.05 318.73 No.629 329.90 701.26 731.45 601.50 07/20 07/21 07/24 07/28 07/31 8C 36.00 EC-ERROR CORRECTION MS-MISCELLANEOUS NSFNOT SUFFICIENT FUNDS OD-OVERDRAFT PS-PAYMENT STOPPED SC-SERVICE CHARGE THE RECONCILEMENT OF THIS STATEMENT WITH YOUR RECORDS I8 E88ENTIAL ANY ERROR OR EXCEPTION SHOULD BE REPORTED IMMEDIATELY