Question

The following information pertains to Tamarisk, Inc.. 1. Cash balance per bank, July 31, $7,923. 2. July bank service charge not recorded by the depositor $37. 3. Cash balance per books, July 31, $7,944. 4. Deposits in transit, July 31, $1,830. 5. The bank collected $1,246 in July for Tamarisk through electronic funds transfer. The collection has not been recorded by Tamarisk. 6. Outstanding checks, July 31, $600. Prepare a bank reconciliation at July 31. (List items that increase cash balance first. Reconcile cash balance per bank first.) Tamarisk, Inc. Bank Reconciliation $ 7923 : 1830 9753 : 600 $ 9153 $ 7944 : 1246 9190 : 600 $ 8590 LINK TO TEXT Journalize the adjusting entries at July 31 on the books of Tamarisk, Inc.. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 31 Bank Charge Expense Cash (To record the collection of accounts receivable.) July 31 (To record the bank service charge.) Click if you would like to Show Work for this question: Open Show Work

Answer 1

Answer:

$ 9153

Cash                         1,209 debit

bank service expense 37 debit

      account receiable         1,246  credit

--to record bank reconciliation--

Explanation:

The objective of the reconciliation is to adjust for the unknow information to each party:

CASH

Beginning Balance 7944

Service Charge            -37

collection                  1246  

Adjusted Balance         9153

Adjustment to cash: 9,153 - 7,944 = 1,209

The company adjust for the service charge and the collection done by the bank as it wasn't recored in the books

BANK

Balance                        7923

Outstanding Check -600

Deposit in transit        1830    

Adjusted Balance 9153

The bank uis unaware of the check until the person goes and cleare it. Same is true for the deposit in transit.