Question

WileyPLUS Problem 7-6

Whispering Winds Spa shows a general ledger balance for the Cash account of $4,169.35 on June 30 and the bank statement as of that date indicates a balance of $4,195.00. When the statement was compared with the cash records, the following facts were determined:

1.		There were bank service charges for June of $23.00.
2.		A bank memo stated that Bao Dai’s note for $906.00 and interest of $51.00 had been collected on June 29, and the bank had charged $4.50 for the collection. Any interest revenue has not been accrued.
3.		Deposits in transit June 30 were $2,950.00.
4.		Cheques outstanding on June 30 totalled $2,081.05.
5.		On June 29, the bank had charged Whispering Winds Spa’s account for a customer’s NSF cheque amounting to $528.20.
6.		A customer’s cheque received as a payment on account of $99.00 had been entered as $76.00 in the cash receipts journal by Whispering Winds Spa on June 15.
7.		Cheque no. 742 in the amount of $505.00 had been entered in the books as $455.00, and cheque no. 747 in the amount of $30.70 had been entered as $551.00. Both cheques were issued as payments on account.
8.		In May, the bank had charged a $33.50 Wella Spa cheque against the Whispering Winds Spa account. The June bank statement indicated that the bank had reversed this charge and corrected its error.

Prepare any journal entries that are needed to adjust the Cash account at June 30. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 2 decimal places, e.g. 52.75.)

Date	Account Titles and Explanation	Debit	Credit
June 30
	(To correct error and record cash receipts)
June 30
	(To record NSF cheque and other cash payments)

Answer 1

Solution:

Date	Account title	Debit	Credit
30-Jun	Cash	1495.80
	Collection fee	4.50
	Accounts Payable (99-76)		23.00
	Note Receivable		906.00
	Interest receivable		51.00
	Account payable (551-30.70)		520.30

30-Jun	Accounts Receivable	528.20
	Miscellaneous expenses	23.00
	Account payable ((505-455)	50.00
	Cash		601.20