Adjusting an Unknown Cash Balance The information that follows is available from the general ledger and the bank statement of the Gentry Corporation for the month of August 2007:
|
1. Bank statement balance, August 31 |
$1,342.50 |
|
2. Note collected by the bank not previously recorded by Gentry |
600 |
|
3. Interest on the preceding note (not previously recorded) |
25 |
|
4. NSF check returned with the bank statement (not previously recorded) |
212.6 |
|
5. Outstanding checks at the end of August |
684.7 |
|
6. Bank service charge for August |
12.85 |
|
7. Deposit in transit, August 31 |
329.42 |
Required
1. Starting with the bank statement balance, prepare a schedule to determine Gentry’s cash balance on August 31, 2007, prior to any required adjustments.
2. Prepare a bank reconciliation to determine Gentry’s adjusted cash balance on August 31, 2007.
3. Prepare the journal entries necessary to bring Gentry’s cash account balance up to date