Answer:
A. Correct cash balance $15,396
Correct cash balance $15,396
B. Aug 31 2020
Dr Cash $1,436
Cr Notes receivable $1,381
Cr Interest revenue $55
Aug 31, 2020
Dr Bank service charges $28
Cr Cash $28
Aug 31, 2020
Dr Supplies expenses $18
Cr Cash $18
Explanation:
A. Preparation of a bank reconciliation dated August 31, 2020
Bank reconciliation
Balance as per bank statement august 31, 2020 11,170
Add Cash on hand $428
Add Deposit in transit $5,248
Less: Outstanding checks ($1,450)
Correct cash balance $15,396
Balance as per books august 31, 2020 (13,879+48,335-48,208) $14,006
Add: note and interest collected $1,436
Less:Bank service charges ($28)
Less Understated for supplies ($18)
($165+$147)
Correct cash balance $15,396
B. Preparation of the adjusting entries.
Aug 31 2020
Dr Cash $1,436
Cr Notes receivable $1,381
($1,436-$55)
Cr Interest revenue $55
Aug 31, 2020
Dr Bank service charges $28
Cr Cash $28
Aug 31, 2020
Dr Supplies expenses $18
Cr Cash $18
($165+$147)
