On August 31 2019 the balance in the checkbook and the Cash

On August 31, 2019, the balance in the checkbook and the Cash account of the Dry Creek Bed and Breakfast was $12,316. The balance shown on the bank statement on the same date was $13,217.

Notes

The firm’s records indicate that a $1,490 deposit dated August 30 and a $705 deposit dated August 31 do not appear on the bank statement.

A service charge of $7 and a debit memorandum of $340 covering an NSF check have not yet been entered in the firm’s records. (The check was issued by Art Corts, a credit customer.)

The following checks were issued but have not yet been paid by the bank:

  

A credit memorandum shows that the bank collected a $2,104 note receivable and interest of $67 for the firm. These amounts have not yet been entered in the firm’s records.

Required:

Prepare a bank reconciliation statement for the firm as of August 31.

Record general journal entries for items on the bank reconciliation statement that must be journalized.

Analyze:
What effect did the journal entries recorded as a result of the bank reconciliation have on the fundamental accounting equation?

Check 712,	$	114
Check 713,	$	129
Check 716,	$	242
Check 736,	$	581
Check 739,	$	82
Check 741,	$	124

Week 3 Assignment 2 Bank Reconcillation Statement 2019 Balance on bank statement Additions: points eBook Deductions: References Total deductions Adjusted bank balance Balance in books Additions: Deductions Ad usted book balance Doneral Journa Prev

Solution

The above entries will have the effect of increasing the assets by (cah) by $60, and increasing the stockholders\' equity (retained earnings) by $60.

Dry Creek Bed and Breakfast
Bank Reconciliation
August , 2019
Balance as per bank	13217	Balance as per cash book	12316
Additions:		Additions:
Deposits in transit *	2195	Outstanding checks **	1272
Bank charges	7	Note collected by bank	2104
NSF check	340	Interest on the note	67
Total Additions	2542	Total Additions	3443
Deductions:		Deductions:
Outstanding checks **	1272	Deposits in transit *	2195
Note collected by bank	2104	Bank charges	7
Interest on the note	67	NSF check	340
Total Deductions	3443	Total Deductions	2542
Balance as per cash book	12316		13217
Deposits in transit *
August 30 deposit	1490
August 31 deposit	705
	2195
Outstanding checks **
Check # 712	114
Check # 713	129
Check # 716	242
Check # 736	581
Check # 739	82
Check # 741	124
	1272