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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.

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  1. 28 September, 02:43
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    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)
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