Question

The following information is available for Park Valley Spa for July Year 1:

BANK STATEMENT STATE BANK BOLTA VISTA, NV 10001
Park Valley Spa 10 Main Street Bolta Vista, NV 10001				Account number 12-4567 July 31, Year 1
Beginning balance 6/30/Year 1				$	9,280
Total deposits and other credits					29,804
Total checks and other debits					22,508
Ending balance 7/31/Year 1					16,576
Checks and Debits				Deposits and Credits
Check No.	Amount			Date			Amount
2350	$	3,766		July	1		$	1,106
2351		1,642		July	10			6,500
2352		8,002		July	15			4,930
2354		1,401		July	21			6,170
2355		6,182		July	26			5,968
2357		1,504		July	30			2,082
DM		11		CM				3,048

The following is a list of checks and deposits recorded on the books of the Park Valley Spa for July Year 1:

Date			Check No.	Amount of Check			Date		Amount of Deposit
July	2		2351	$	1,642		July	8	$	6,500
July	4		2352		8,002		July	14		4,930
July	10		2353		2,897		July	21		6,170
July	10		2354		1,401		July	26		5,968
July	15		2355		6,182		July	29		2,082
July	20		2356		73		July	30		3,552
July	22		2357		1,504

Other Information

1. Check no. 2350 was outstanding from June.
2. The credit memo was for collection of notes receivable.
3. All checks were paid at the correct amount.
4. The debit memo was for printed checks.
5. The June 30 bank reconciliation showed a deposit in transit of $1,106.
6. The unadjusted Cash account balance at July 31 was $14,121.

Required
a. Prepare the bank reconciliation for Park Valley Spa at the end of July.
b. Record in general journal form any necessary entries to the Cash account to adjust it to the true cash balance.

Answer 1

a.

Park Valley Spa
Bank Reconciliation
As of July 31, Year 1
Bank Statement			Company's Books
Ending Balance per Bank Statement		16576	Ending Balance per Cash Account		14121
Additions:			Additions:
Deposits in transit		3552	Note receivable collected by bank		3048
		20128			17169
Deductions:			Deductions:
Outstanding checks			Check printing charges		11
Check No. 2353	2897
Check No. 2356	73
		2970
Adjusted Balance		17158	Adjusted Balance		17158

b.

GENERAL JOURNAL
Date	Account Titles	DR	CR
July 31	Cash	3048
	Note receivable		3048
	(To record note collected by bank)
July 31	Miscellaneous expense	11
	Cash		11
	(To record debit memo for check printing charges)