Question

The following information is available for Park Valley Spa for July 2016:

BANK STATEMENT STATE BANK BOLTA VISTA, NV 10001
Park Valley Spa   10 Main Street   Bolta Vista, NV 10001				Account number   12-4567   July 31, 2016
Beginning balance 6/30/2016				$ 9,020
Total deposits and other credits				29,804
Total checks and other debits				22,506
Ending balance 7/31/2016				16,318
Checks and Debits				Deposits and Credits
Check No.	Amount			Date		Amount
2350	$	3,766		July	1	$	1,107
2351		1,643		July	10		6,493
2352		7,996		July	15		4,929
2354		1,405		July	21		6,171
2355		6,184		July	26		5,965
2357		1,498		July	30		2,090
DM		14		CM			3,049

The following is a list of checks and deposits recorded on the books of the Park Valley Spa for July 2016:

Date		Check No.	Amount of Check			Date		Amount of Deposit
July	2	2351	$	1,643		July	8	$	6,493
July	4	2352		7,996		July	14		4,929
July	10	2353		2,892		July	21		6,171
July	10	2354		1,405		July	26		5,965
July	15	2355		6,184		July	29		2,090
July	20	2356		74		July	30		3,548
July	22	2357		1,498

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 $1,107.
6.	The unadjusted Cash account balance at July 31 was $13,865.

Required:

a.	Prepare the bank reconciliation for Park Valley Spa at the end of July. (Enter all amounts as positive values, except total deductible amounts which should be indicated with a minus sign. Record the entries in the given order.)

        

PARK VALLEY SPA
Bank Reconciliation
July 31, 2016
Unadjusted Bank Balance, July 31, 2016
True Cash Balance, July 31, 2016
Unadjusted Book Balance, July 31, 2016
True Cash Balance, July 31, 2016

b.	Record in general journal form any necessary entries to the Cash account to adjust it to the true cash balance. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet

Note: Enter debits before credits.

Record the collection of notes receivable

Event	General Journal	Debit	Credit
1

Journal entry worksheet

Note: Enter debits before credits.

Record cash paid for office supplies expenses

Event	General Journal	Debit	Credit
2

Answer 1

SOLUTION

(A) Bank reconciliation statement

Particulars	Amount ($)
Unadjusted bank balance	16,318
Add: Deposit in transit	3,548
Less: Outstanding check 2353	(2,892)
Outstanding check 2356	(74)
Adjusted bank balance	16,900
Unadjusted book balance	13,865
Add: Credit memo for collection of notes receivable	3,049
Less: Debit memo of printed checks	(14)
Adjusted book balance	16,900

(B) Journal entries

S.No.	Accounts titles and Explanation	Debit ($)	Credit ($)
1.	Cash	3,049
	Notes receivable		3,049
	(To record collection of notes receivable)
2.	Office supplies expense	14
	Cash		14
	(To record cash paid for office supplies expense)