(Bank Reconciliation and Adjusting Entries) The cash account of Aguilar Co. showed a ledger balance of $3,076.20 on June 30, 2020. The bank statement as of that date showed a balance of $4,232.90. Upon comparing the statement with the cash records, the following facts were determined. 1. There were bank service charges for June of $65. 2. A bank memo stated that Bao Dai's note for $1,800 and interest revenue of $90 had been collected on June 29, and the bank had made a charge of $20.00 as fees for the collection. (No entry had been made on Aguilar's books when Bao Dai's note was sent to the bank for collection.) 3. Cash receipts for June 30 for $2,248.50 were not deposited until July 2. 4. Checks outstanding on June 30 totaled $1,785.80. 5. The bank had charged the Aguilar Co.'s account for a customer's uncollectible (NSF) check amounting to $175.60 on June 29. 6. A customer's check for $385 had been deposited correctly at the bank but entered as $355 in the cash receipts journal by Aguilar on June 15. 7. Check no. 742 correctly written in the amount of $870 had been entered in the cash journal as $780, and check no. 747 correctly written in the amount of $230.00 had been entered as $280.00. Both checks had been issued to pay for purchases of equipment which was entered into the ledger correctly on initial transaction. (HINT- Treat as two separate items on the reconciliation) Instructions (a) Prepare a bank reconciliation dated June 30, 2020, proceeding to a correct cash balance. (b) Prepare any entries necessary to make the general ledger correct and complete. *Assume sales related to deposit errors were on account. **Assume the check error related to Equipment purchase was on account, meaning the original entry to Equipment and Accounts Payable was correct.
| Balance per bank, June 30 | 4,232.90 |
| Add: Deposits in transit | 2,248.50 |
| Deduct: Outstanding checks | 1,785.80 |
| Correct cash balance, June 30 | 4,695.60 |
| Balance per books, June 30 | 3,076.20 |
| Add: Error in recording deposit ($385 – $355) | 30 |
| Error on check no. 747 (280 -230) | 50 |
| Note collection ($1,800 + 90) | 1,890.00 |
| Deduct: NSF check | 175.60 |
| Error on check no. 742 ($870 – $780) | 90 |
| Bank service charges ($65 + $20) | 85 |
| Correct cash balance, June 30 | 4,695.60 |
| DR | CR | |
| Cash | 1,970 | |
| Accounts Receivable | 30 | |
| Equipment | 50 | |
| Notes Receivable | 1,800 | |
| Interest Revenue | 90 | |
| DR | CR | |
| Accounts Receivable | 175.60 | |
| Equipment | 90 | |
| Office Expense—Bank Charges | 85 | |
| Cash | 350.60 |
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