Gray Corporation controls its cash by depositing receipts on a daily basis and making all disbursements by cheque.After all the posting for the month of August 2020 was completed, the cash balance in the general ledger accountat the end of the month was $10,475. The bank statement for the month end received from the First National Bankshowed the balance to be $18,000. The following data are available for the purpose of reconciling these balances:a. Cash receipts collected on August 31 amounting to $3,000 have been placed in the night depository anddo not appear on the bank statement.b. Bank memos previously not available to the company are included with the bank statement. A memo foran NSF cheque, originally received as payment for an account receivable of $3,000, is included. A memofor bank charges of $75 for the NSF cheque is also included. Another memo advises the company that$2,000 Note Receivable has been collected by the bank, ($1,950 deposit and a bank charge of $50). Thisrepresents the net proceeds of a collection the bank had made on behalf of the company on a $2,000note receivable.c. Cheques written during the month but not included with the bank statement are no. 1200, $1,500; no.1223, $2,000; no. 1260, $950; no. 1294, $3,500.d. Cheque no. 1222 is returned with the bank statement. The cheque was made for $6,500, the correctamount owing for office expense. The cheque was recorded in the company records in the amount of$5,600.e. Cheques outstanding at the end of July included cheques no. 1114 for $1,600 and no. 1116 for $1,250.Cheque no. 1116 cleared the August bank statement; cheque no. 1114 did not.Required:1. Prepare a bank reconciliation at August 31.2. Prepare the necessary adjusting journal entries required to make the cash account in the general ledgeragree with the adjusted cash balance on the July bank reconciliation.

Bank Reconciliation Statement is an account prepared to match the balances as per firm's cash book…

Required: 1. Prepare a bank reconciliation at August 31. 2. Prepare the necessary adjusting journal entries required to make the cash account in the general ledger agree with the adjusted cash balance on the July bank reconciliation.

Required: 1. Prepare a bank reconciliation at August 31. 2. Prepare the necessary adjusting journal entries required to make the cash account in the general ledger agree with the adjusted cash balance on the July bank reconciliation.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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