Question

On August 31, 2021, the general ledger of The Dean Acting Academy shows a balance for...

On August 31, 2021, the general ledger of The Dean Acting Academy shows a balance for cash of $7,794. Cash receipts yet to be deposited into the checking account total $3,188, and checks written by the academy but not yet processed by the bank total $1,275. The company's balance of cash does not reflect a bank service fee of $20 and interest earned on the checking account of $31. These amounts are included in the balance of cash of $5,892 reported by the bank as of the end of August.

Homework Answers

Answer #1

1)Bank reconciliation statement is as follows:

   Dean Acting Academy

   Bank reconciliation statement

For the year ended August 31, 2021

$
Balance as per bank Records 5,892
Add: Deposit in Transit 3,188
Less: Outstanding checks ( 1,275)
Adjusted Bank Balance 7,805
Balance as per book Records 7,794
Add: Interest Earned 31
Less:Bank Service Fees (20)
Adjusted Cash Balance 7,805

2) Journal entries are as follows:

Date Account and Explanation Debit ($) Credit($)
Aug. 31, 2021 Cash 31
Interest Revenue 31
(Recorded the collection of Interest Revenue)
Aug. 31, 2021 Bank service fee 20
  Cash 20
(Recorded the Bank service fee )
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