[The following information applies to the questions
displayed below.]
The cash records and bank statement for the month of July for
Glover Incorporated are shown below.
| GLOVER INCORPORATED | ||||||||||||||||||
| Cash Account Records | ||||||||||||||||||
| July 1, 2021, to July 31, 2021 | ||||||||||||||||||
| Cash Balance | Cash Balance | |||||||||||||||||
| July 1, 2021 | + | Cash Receipts | − | Cash Disbursements | = | July 31, 2021 | ||||||||||||
| $7,510 | $8,720 | $10,560 | $5,670 | |||||||||||||||
| Cash Receipts | Cash Disbursements | |||||||||||||||||
| Date | Desc. | Amount | Date | Check# | Desc. | Amount | ||||||||||||
| 7/9 | Sales | $ | 2,660 | 7/7 | 531 | Rent | $ | 1,600 | ||||||||||
| 7/21 | Sales | 3,240 | 7/12 | 532 | Salaries | 2,060 | ||||||||||||
| 7/31 | Sales | 2,820 | 7/19 | 533 | Equipment | 4,500 | ||||||||||||
| 7/22 | 534 | Utilities | 1,000 | |||||||||||||||
| 7/30 | 535 | Advertising | 1,400 | |||||||||||||||
| $ | 8,720 | $ | 10,560 | |||||||||||||||
| P.O. Box 123878 | FIDELITY UNION | Member FDIC | |||||||||||||||||||||||||
| Gotebo, OK 73041 | You Can Bank On Us | ||||||||||||||||||||||||||
| (580) 377-OKIE | |||||||||||||||||||||||||||
| Account Holder: | Glover Incorporated | Account Number: | 2252790471 | ||||||||||||||||||||||||
| 519 Main Street | |||||||||||||||||||||||||||
| Gotebo, OK 73041 | Statement Date: | July 31, 2021 | |||||||||||||||||||||||||
| Beginning Balance | Deposits and Credits | Withdrawals and Debits | Ending Balance | ||||||||||||||||||||||||
| July 1, 2021 | NO. | Total | NO. | Total | July 31, 2021 | ||||||||||||||||||||||
| $8,200 | 3 | $5,960 | 7 | $ 10,410 | $ 3,750 | ||||||||||||||||||||||
| Deposits and Credits | Withdrawals and Debits | Daily Balance | |||||||||||||||||||||||||
| Date | Amount | Desc. | Date | No. | Amount | Desc. | Date | Amount | |||||||||||||||||||
| 7/10 | $ | 2,660 | DEP | 7/2 | 530 | $ | 690 | CHK | 7/2 | $ | 7,510 | ||||||||||||||||
| 7/22 | 3,240 | DEP | 7/10 | 531 | 1,600 | CHK | 7/10 | 8,570 | |||||||||||||||||||
| 7/31 | 60 | INT | 7/14 | 532 | 2,060 | CHK | 7/14 | 6,510 | |||||||||||||||||||
| 7/18 | 500 | NSF | 7/18 | 6,010 | |||||||||||||||||||||||
| 7/22 | 533 | 4,900 | CHK | 7/22 | 4,350 | ||||||||||||||||||||||
| 7/26 | 600 | EFT | 7/26 | 3,750 | |||||||||||||||||||||||
| 7/30 | 60 | SF | 7/30 | 3,690 | |||||||||||||||||||||||
| 7/31 | $ | 3,750 | |||||||||||||||||||||||||
| $ | 5,960 | $ | 10,410 | ||||||||||||||||||||||||
| Desc. | DEP Customer deposit | INT Interest earned | SF Service fees |
| NOTE Note collected | CHK Customer check | NSF Nonsufficient funds | |
| EFT Electronic funds transfer |
Additional information:
The difference in the beginning balances in the company’s records and the bank statement relates to check #530, which is outstanding as of June 30, 2021.
Check #533 is correctly processed by the bank.
The EFT on July 26 relates to the purchase of office supplies.
Required:
1. Prepare a bank reconciliation for Glover’s
checking account on July 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.)
Solution 1:
| Glover Incorporated | |||
| Bank Reconciliation - July 31 | |||
| Bank's Cash balance | Company's cash balance | ||
| Particulars | Amount | Particulars | Amount |
| Ending balance as per Bank Statements | $3,750.00 | Ending Balance as per cash books | $5,670.00 |
| Additions: | Additions: | ||
| Outstanding Deposits | $2,820.00 | Interest earned | $60.00 |
| Deductions: | Deductions: | ||
| Outstanding Checks (Check 534, 535) ($1,000 + $1,400) | -$2,400.00 | NSF Cheque | -$500.00 |
| EFT | -$600.00 | ||
| Incorrect recording of check 533 | -$400.00 | ||
| Service Fees | -$60.00 | ||
| Up to date cash balance as per bank | $4,170.00 | Up to date cash balance as per books | $4,170.00 |
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