Epto Ergo’s bank statement from Crypto Bank at July 31, 2020, gives the following information. Balance, July 1 $18,400 Bank debit memorandum: August deposits 71,000 Safety deposit box fee $ 25 Checks cleared in July 68,678 Service charge 50 Bank credit memorandum: Balance, July 31 20,692 Interest earned 45 A summary of the Cash account in the ledger for July shows the following: balance, July 1, $18,700; receipts $74,000; disbursements $73,570; and balance, July 31, $19,130. Analysis reveals that the only reconciling items on the June 30 bank reconciliation were a deposit in transit for $4,800 and outstanding checks of $4,500. In addition, you determine that there was an error involving a company check drawn in July: A check for $400 to a creditor on account that cleared the bank in July was journalized and posted for $40. Instructions a) Determine deposits in transit. b) Determine outstanding checks. (Hint: You need to correct disbursements for the check error.) c) Prepare a bank reconciliation at July 31. d) Journalize the adjusting entry(ies) to be made by Epto Ergo at July 31
Epto Ergo’s bank statement from Crypto Bank at July 31, 2020, gives the
following information.
Balance, July 1 $18,400 Bank debit memorandum:
August deposits 71,000 Safety deposit box fee $ 25
Checks cleared in July 68,678 Service charge 50
Bank credit memorandum: Balance, July 31 20,692
Interest earned 45
A summary of the Cash account in the ledger for July shows the following:
balance, July 1, $18,700; receipts $74,000; disbursements $73,570;
and balance, July 31, $19,130.
Analysis reveals that the only reconciling items on the June 30 bank reconciliation were a
deposit in transit for $4,800 and outstanding checks of $4,500. In addition, you determine that
there was an error involving a company check drawn in July: A check for $400 to a creditor on
account that cleared the bank in July was journalized and posted for $40.
Instructions
a) Determine deposits in transit.
b) Determine outstanding checks. (Hint: You need to correct disbursements for the
check error.)
c) Prepare a bank reconciliation at July 31.
d) Journalize the
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