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	$	30,000		7/1	101	Insurance	$	3,600
7/15	Clinic receipts		1,800		7/2	102	Legal fees		1,000
7/22	Clinic receipts		2,760		7/7	DC	Advertising		200
7/30	Clinic receipts		3,600		7/8	103	Bikes		11,000
8/1	Borrowing		20,000		7/24	DC	Advertising		600
8/10	Clinic receipts		5,100		8/4	104	Kayaks		14,000
8/17	Clinic receipts		11,900		8/24	DC	Office supplies		1,700
9/21	Clinic receipts		12,200		9/1	105	Rent		1,200
10/17	Clinic receipts		16,900		12/8	106	Race permit		1,100
12/15	Race receipts		30,000		12/16	107	Salary		2,000
					12/31	108	Dividend		3,000
					12/31	109	Dividend		3,000
		$	134,260					$	42,400

	Summary of Transactions
	Beginning												Ending
	Cash Balance												Cash Balance
	July 1, 2021			+	Cash Receipts			−	Cash Disbursements			=	December 31, 2021
	$	0			$	134,260			$	42,400			$	91,860

  

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

$104,560

11

$34,500

$70,060

Account Details

Deposits and Credits

Withdrawals and Debits

Daily Balance

Date

Amount

Desc.

Date

No.

Amount

Desc.

Date

Amount

7/1

$

30,000

DEP

7/1

101

$

3,600

CHK

7/1

$

26,400

8/1

8,160

DEP

7/7

102

1,000

CHK

7/7

25,200

8/1

20,000

DEP

7/7

200

DC

7/14

14,200

9/1

17,000

DEP

7/14

103

11,000

CHK

7/24

13,600

9/30

100

INT

7/24

600

DC

8/1

41,760

10/1

12,200

DEP

8/9

104

14,000

CHK

8/9

27,760

11/1

16,900

DEP

8/24

1,700

DC

8/24

26,060

12/31

200

INT

9/2

105

1,200

CHK

9/1

43,060

9/30

50

SF

9/2

41,860

12/10

106

1,100

CHK

9/30

41,910

12/31

50

SF

10/1

54,110

11/1

71,010

12/10

69,910

$

104,560

$

34,500

12/31

$

70,060

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 $70,060 is substantially less than the company’s balance of $91,860.

1. 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.)

1. 2-b. 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			70,060	per general ledger			91,860
	Deposit in transit			30,000	interest earned			300
	checks oustanding			-8000	Service fees			-100
	Bank balance per reconciliation			92,060	Company bal per reconciliation			92,060
2b)	Date	General Journal				Debit	Credit
1)	12/31/2018	cash				300
		interest earned					300
2)	12/31/2018	service fee				100
		cash					100