Mazor Inc.”s bank statement from Hometown Bank at August 31, 2012, gives the following information.
|
Balance, August 1 |
$18,400 |
Bank debit memorandum: |
|
|
August deposits |
71,000 |
Safety deposit box fee |
$25 |
|
Checks cleared in August |
68,678 |
Service charge |
50 |
|
Bank credit memorandum: |
Balance, August 31 |
20,692 |
|
|
Interest earned |
45 |
A summary of the Cash account in the ledger for August shows the following: balance, August
1, $18,700; receipts $74,000; disbursements $73,570; and balance, August 31, $19,130. Analysis reveals that the only reconciling items on the July 31 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 August: A check for $400 to a creditor on account that cleared the bank in August 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 August 31.
(d) Journalize the adjusting entry(ies) to be made by Mazor Inc. at August 31.