Question

Problem 7-03A

On July 31, 2022, Sunland Company had a cash balance per books of $6,330.00. The statement from Dakota State Bank on that date showed a balance of $7,880.80. A comparison of the bank statement with the Cash account revealed the following facts.

1.		The bank service charge for July was $22.00.
2.		The bank collected $1,710.00 from a customer for Sunland Company through electronic funds transfer.
3.		The July 31 receipts of $1,386.30 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 L. Taylor, a creditor, for $354.00 that cleared the bank in July was incorrectly entered in the cash payments journal on July 10 for $345.00.
5.		Checks outstanding on July 31 totaled $2,023.10.
6.		On July 31, the bank statement showed an NSF charge of $765.00 for a check received by the company from W. Krueger, a customer, on account.

Prepare the bank reconciliation as of July 31. (List items that increase balance as per bank & books first.)

SUNLAND COMPANY Bank Reconciliation choose the accounting period For the Month Ended July 31, 2022For the Year Ended July 31, 2022July 31, 2022
select an opening name for section one Outstanding checksElectronic funds transfer receivedCash balance per bank statementAdjusted cash balance per bankBank service chargeDeposits in transitError in recording check No. 2480NSF check					$enter a dollar amount
select between addition and deduction AddLess :	select a reconciling item Bank service chargeDeposits in transitCash balance per bank statementError in recording check No. 2480Outstanding checksAdjusted cash balance per bankElectronic funds transfer receivedNSF check				enter a dollar amount
					enter a subtotal of the two previous amounts
select between addition and deduction AddLess :	select a reconciling item Deposits in transitBank service chargeCash balance per bank statementAdjusted cash balance per bankOutstanding checksElectronic funds transfer receivedNSF checkError in recording check No. 2480				enter a dollar amount
select a closing name for section one Error in recording check No. 2480Adjusted cash balance per bankElectronic funds transfer receivedOutstanding checksDeposits in transitNSF checkBank service chargeCash balance per bank statement					$enter a total amount for the first section
select an opening name for section two Cash balance per booksError in recording check No. 2480Electronic funds transfer receivedOutstanding checksNSF checkBank service chargeAdjusted cash balance per booksDeposits in transit					$enter a dollar amount
select between addition and deduction AddLess :	select a reconciling item Outstanding checksElectronic funds transfer receivedNSF checkError in recording check No. 2480Bank service chargeCash balance per booksAdjusted cash balance per booksDeposits in transit				enter a dollar amount
					enter a subtotal of the two previous amounts
select between addition and deduction AddLess :
	select a reconciling item     Bank service charge    Adjusted cash balance per books    Deposits in transit    Outstanding checks    Electronic funds transfer received    Cash balance per books    Error in recording check No. 2480    NSF check		$enter a dollar amount
	select a reconciling item     NSF check    Electronic funds transfer received    Cash balance per books    Error in recording check No. 2480    Bank service charge    Deposits in transit    Outstanding checks    Adjusted cash balance per books		enter a dollar amount
	select a reconciling item     Outstanding checks    Deposits in transit    Adjusted cash balance per books    Electronic funds transfer received    NSF check    Error in recording check No. 2480    Bank service charge    Cash balance per books		enter a dollar amount
					enter a subtotal of the three previous amounts
select a closing name for section two Bank service chargeOutstanding checksElectronic funds transfer receivedNSF checkCash balance per booksError in recording check No. 2480Adjusted cash balance per booksDeposits in transit					$enter a total amount for the second section

Answer 1

Prepare the bank reconciliation as of July 31. (List items that increase balance as per bank & books first.)

SUNLAND COMPANY Bank Reconciliation July 31, 2022
balance per bank statement					7880.80
ADD	Deposit in transit				1386.30
					9267.10
Less	Outstanding Checks				-2023.10
Adjusted cash balance					7244
Balance as per Cash book					6330
Add	Collection by Bank				1710
					8040
Less:
	Bank Charges		-22
	NSF Check		-765
	Error in Check		-9
					-796
Adjusted Cash balance					7244