Question

An examination of the cash activities during the year shows the following.  
     

GREAT ADVENTURES
Cash Account Records
July 1, 2021, to December 31, 2021
Cash Receipts					Cash Disbursements
Date	Desc.	Amount			Date	Check#	Desc.	Amount
7/1	Stock sale	$	20,000		7/1	101	Insurance	$	3,840
7/15	Clinic receipts		2,000		7/2	102	Legal fees		1,100
7/22	Clinic receipts		2,300		7/7	DC	Advertising		220
7/30	Clinic receipts		4,000		7/8	103	Bikes		11,200
8/1	Borrowing		22,000		7/24	DC	Advertising		620
8/10	Clinic receipts		3,000		8/4	104	Kayaks		16,800
8/17	Clinic receipts		10,500		8/24	DC	Office supplies		1,720
9/21	Clinic receipts		12,400		9/1	105	Rent		1,440
10/17	Clinic receipts		17,100		12/8	106	Race permit		1,120
12/15	Race receipts		20,000		12/16	107	Salary		2,000
					12/31	108	Dividend		2,000
					12/31	109	Dividend		2,000
		$	113,300					$	44,060

	Summary of Transactions
	Beginning												Ending
	Cash Balance												Cash Balance
	July 1, 2021			+	Cash Receipts			−	Cash Disbursements			=	December 31, 2021
	$	0			$	113,300			$	44,060			$	69,240

  

Suzie has not reconciled the company’s cash balance with that of the bank since the company was started. She asks Summit Bank to provide her with a six-month bank statement. To save time, Suzie makes deposits at the bank only on the first day of each month.
   

SUMMIT BANK

Member FDIC

Leading You to the Top

Account Holder:

Great Adventures, Inc.

Account Number:

1124537774

Statement Date:

Dec. 31, 2021

Account Summary

Beginning Balance

Deposits and Credits

Withdrawals and Debits

Ending Balance

July 1, 2021

No

Total

No

Total

December 31, 2021

$0

8

$93,800

11

$38,260

$55,540

Account Details

Deposits and Credits

Withdrawals and Debits

Daily Balance

Date

Amount

Desc.

Date

No.

Amount

Desc.

Date

Amount

7/1

$

20,000

DEP

7/1

101

$

3,840

CHK

7/1

$

16,160

8/1

8,300

DEP

7/7

102

1,100

CHK

7/7

14,840

8/1

22,000

DEP

7/7

220

DC

7/14

3,640

9/1

13,500

DEP

7/14

103

11,200

CHK

7/24

3,020

9/30

200

INT

7/24

620

DC

8/1

33,320

10/1

12,400

DEP

8/9

104

16,800

CHK

8/9

16,520

11/1

17,100

DEP

8/24

1,720

DC

8/24

14,800

12/31

300

INT

9/2

105

1,440

CHK

9/1

28,300

9/30

100

SF

9/2

26,860

12/10

106

1,120

CHK

9/30

26,960

12/31

100

SF

10/1

39,360

11/1

56,460

12/10

55,340

$

93,800

$

38,260

12/31

$

55,540

Desc.	DEP Customer deposit	INT Interest earned	SF Service fees
	CHK Customer check	DC Debit card

After comparing the two balances, Suzie has some concern because the bank’s balance of $55,540 is substantially less than the company’s balance of $69,240

2-a. Prepare Great Adventures’ bank reconciliation for the six-month period ended December 31, 2021. (Amounts to be deducted should be indicated with a minus sign. Total entries to the same account together when entering in the bank reconciliation.)

2b. Record any necessary entries to adjust cash. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Total entries to the same account together when entering in the journal entry carousel.)

Answer 1

			Great Adventures Inc
			Bank Reconciliation
			December 31,2018
	Bank's cash balance				Company's cash balance
	per bank statement			55,540	per general ledger			69,240
	Deposit in transit			20,000	interest earned			500
	checks oustanding			-6000	Service fees			-200
	Bank balance per reconciliation			69,540	Company bal per reconciliation			69,540
2b)	Date	General Journal				Debit	Credit
1)	12/31/2018	cash				500
		interest earned					500
2)	12/31/2018	service fee				200
		cash					200