On August 31, 2018, the general ledger of The Dean Acting Academy shows a balance for cash of $7,944. Cash receipts yet to be deposited into the checking account total $3,338, and checks written by the academy but not yet processed by the bank total $1,425. The company's balance of cash does not reflect a bank service fee of $35 and interest earned on the checking account of $46. These amounts are included in the balance of cash of $6,042 reported by the bank as of the end of August. 1. Prepare a bank reconciliation to calculate the correct ending balance of cash on August 31, 2018 2. Record the necessary entry (ies) to adjust the balance for cash.

Question

Business

Hudson Orozco

27 September, 23:58

On August 31, 2018, the general ledger of The Dean Acting Academy shows a balance for cash of $7,944. Cash receipts yet to be deposited into the checking account total $3,338, and checks written by the academy but not yet processed by the bank total $1,425. The company's balance of cash does not reflect a bank service fee of $35 and interest earned on the checking account of $46. These amounts are included in the balance of cash of $6,042 reported by the bank as of the end of August. 1. Prepare a bank reconciliation to calculate the correct ending balance of cash on August 31, 2018 2. Record the necessary entry (ies) to adjust the balance for cash.

+3

Answers (1)

Know the Answer?

Ariella Maldonado · Answer 1

The Dean Acting Academy

Bank reconciliation statement

August 31, 2018

Particulars Amount Particulars Amount

Bank cash balance $6,042 Company cash balance $7,944

Deposits in transit $3,338 Interest earned $46

Less: Outstanding Less: service fee - $35

Check - $1,425

Bank balance Company balance

After reconciliation $7,955 After reconciliation $7,955

2. The adjusting entries are

Cash A/c Dr $46

To Interest revenue $46

(Being the interest revenue is recorded)

Bank service fee expense A/c Dr $35

To Cash A/c $35

(Being the service fee expense of bank is recorded)