Question

On July 31, 2020, Thor Company’s bank statement shows a cash balance of $9,710, but the...

On July 31, 2020, Thor Company’s bank statement shows a cash balance of $9,710, but the general ledger shows a balance of $8,730.

Further review of the bank statement and Thor’s company records reveals the following:

  1. Deposits outstanding: Deposited by Thor but not on the bank statement. $2,760
  2. Checks outstanding: Recorded by Thor but not on the bank statement. $3,930
  3. The bank included interest earned in Thor’s account. $20
  4. The bank statement shows an automatic withdrawal for July rent. $150
  5. The bank statement shows a bank service charge on July 31, 2020. $60

REQUIREMENT 1:  Prepare a bank reconciliation as of July 31, 2020 for Thor Company.

REQUIREMENT 2: Prepare the necessary entries to adjust the balance of cash.

Business   Accounting   
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Homework Answers

Answer #1
Balance as per bank statement 9710
ADD : Deposits in transit 2760
12470
LESS : Outstanding checks (3930)
ADJUSTED BALANCE AS PER BANK 8540
Balance as per books 8730
ADD : Interest earned 20
8750
LESS : Withdrawal for rent (150)
LESS : Bank service charges (60)
ADJUSTED BALANCE AS PER BOOKS 8540

.

.

Account Debit Credit
A Cash 20
Interest revenue 20
(to record interest earned)
B Rent expense 150
Cash 150
C Miscellaneous expenses (Bank service charges) 60
Cash 60
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