Reference no: EM132452702

Question 1: On August 1, 2019, the accountant for Western Imports downloaded the company's July 31, 2019, bank statement from the bank's Website. The balance shown on the bank statement was $28,730. The July 31, 2019, balance in the Cash account in the general ledger was $14,325.

Jenny Irvine, the accountant for Western Imports, noted the following differences between the bank's records and the company's Cash account in the general ledger:

a. An electronic funds transfer for $14,100 from Foncier Ricard, a customer located in France, was received by the bank on July 31.

b. Check 1422 was correctly written and recorded for $1,200. The bank mistakenly paid the check for $1,220.

c. The accounting records indicate that Check 1425 was issued for $66 to make a purchase of supplies. However, examination of the check online showed that the actual amount of the check was for $96.

d. A deposit of $770 made after banking hours on July 31 did not appear on the July 31 bank statement e. The following checks were outstanding: Check 1429 for $1,246, and Check 1430 for $138. f. An automatic debit of $259 on July 31 from CentralComm for telephone service appeared on the bank statement but had not been recorded in the company's accounting records.

Required:

1. Prepare a bank reconciliation for the firm as of July 31.

2. Record general journal entries for the items on the bank reconiliation that must be journalized.

Analyze:

What effect on total expenses occurred as a result of the general journal entries recorded?

Question 2: On August 31, 2019, the balance in the checkbook and the Cash account of the Dry Creek Bed and Breakfast was $12,263. The balance shown on the bank statement on the same date was $13,187.
Notes

a. The firm's records indicate that a $1,430 deposit dated August 30 and a $699 deposit dated August 31 do not appear on the bank statement.

b. A service charge of $8 and a debit memorandum of $310 covering an NSF check have not yet been entered in the firm's records. (The check was issued by Art Cons, a credit customer.)

c. The following checks were issued but have not yet been paid by the bank:

Check 712, $108

Check713, $123

Check 716, $236

Check 736, $575

Check 739, $ 76

Check 741, $118

d. A credit memorandum shows that the bank collected a $2,074 note receivable and interest of $61 for the firm. These amounts have not yet been entered in the firm's records.

Required:

1. Prepare a bank reconciliation statement for the firm as of August 31.

2.. Record general journal entries for items on the bank reconciliation statement that must be journalized.