Question

On August 31, 2021, the general ledger of The Dean Acting Academy shows a balance for cash of $7,924. Cash receipts yet to be deposited into the checking account total $3,318, and checks written by the academy but not yet processed by the bank total $1,405. The company's balance of cash does not reflect a bank service fee of $33 and interest earned on the checking account of $44. These amounts are included in the balance of cash of $6,022 reported by the bank as of the end of August.

Required:

1. Prepare a bank reconciliation to calculate the correct ending balance of cash on August 31, 2021. (Amounts to be deducted should be indicated with a minus sign.)

2. Record the necessary entry(ies) to adjust the balance for cash. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Bank Reconciliation- The Dean Acting Academy
		Amount			Amount
Bank Statement Balance		$6,022	Book Balance		$7,924
Add:			Add:
Deposit in transit		$3,318	Interest Earned		$44
Deduct			Deduct
Outstanding Check		-$1,405	Bank Service Check		-$33
Correct Balance		$7,935	Correct Balance		$7,935

Journal Entry
Date	Accoutn Tittle	Debit	Credit
31-Aug	Cash	$44.00
	Interet Revenue		$44.00
31-Aug	Bank Service Fee Expense	$33.00
	Cash		$33.00