On July 31, 2020, Vaughn Company had a cash balance per books of $6,132.05. The statement from Dakota State Bank on that date showed a balance of $7,748.15. A comparison of the bank statement with the Cash account revealed the following facts.

1. The bank service charge for July was $25.
2. The bank collected $1,720 for Keeds Company through electronic funds transfer.
3. The July 31 receipts of $1,297.50 were not included in the bank deposits for July. These receipts were deposited by the company in a night deposit vault on July 31.
4. Company check No. 2480 issued to L. Taylor, a creditor, for $391 that cleared the bank in July was incorrectly entered as a cash payment on July 10 for $319.
5. Checks outstanding on July 31 totaled $1,866.60.
6. On July 31, the bank statement showed an NSF charge of $576 for a check received by the company from W. Krueger, a customer, on account.

Required:
Prepare the bank reconciliation as of July 31.

Respuesta :

Answer and Explanation:

The preparation of the bank reconciliation as of July 31 is presented below;

Cash balance as per bank statement $7,748.15

Add: deposit in transit $1,297.50

Less: outstanding checks $1,866.60

Adjusted cash balance per bank $7,179.05

Cash balance as per books $6,132.05

Add: electronic fund transfer received $1,720

Less: error ($391 - $319) -$72

Less: service charges - $25

Less: NSF charges - $576

Adjusted bank balance per books $7,179.05

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