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As of June 30, 2016, the bank statement showed an ending balance of $19,500. The unadjusted Cash account balance was $15,200. The following information is available:
1. Deposit in transit, $2,400.
2. Credit memo in bank statement for interest earned in June, $30.
3. Outstanding check, $6,690.
4. Debit memo for service charge, $20.
Required
a. Determine the true cash balance by preparing a bank reconciliation as of June 30, 2016, using the preceding information.
b. Record in general journal foamy the adjusting entries necessary to correct the unadjusted book balance.
Expert Answer
| Bank Reconciliation statement | |||
| Balance per bank statement, June 30 | $19,500 | ||
| Add: Deposit in transit | 2400 | ||
| $2,400 | |||
| $21,900 | |||
| Less: Outstanding checks | 6690 | ||
| 6,690 | |||
| Adjusted balance, June 30 | $15,210 | ||
| Balance per bookks, June 30 | $15,200 | ||
| Interest revenue | 30 | 30 | |
| $15,230 | |||
| Less: | |||
| Service charges | $20 | $20 | |
| Adjusted balance as per books, June 30 | $15,210 | ||
| Hence true cash balance is $15210 | |||
| ans 2 | |||
| Accounts Title | Dr | Cr | |
| Cash | $30 | ||
| Interest revenue | 30 | ||
| Bank charges | 20 | ||
| Cash | 20 |
