P7-4A Bank ReconciliationOn July 31, Sullivan Company’s Cash in Bank account had a balance of $ 8, 112.62. On that date, the bank statement indicated a balance of $ 9, 098.55. A comparison of returned checks and bank advices revealed the following:Deposits in transit July 31, amounted to $3, 358.19.Outstanding checks July 31 totaled $1, 251.12.The bank erroneously charged a $215 check of Solomon Company against the Sullivan bank account.A $15 bank service charge has not yet been recorded by Sullivan Company.Sullivan neglected to record $3,000 borrowed from the bank on a ten percent six-month note. The bank shows the $3, 000 as a deposit.Included with the returned checks is a memo indicating that J. Martin’s check for $640 had been returned NSF. Martin, a customer had sent the check to pay an account of $660 less a $20 discount.Sullivan Company recorded a $107 payment for repairs as $1, 070. Required:Prepare a bank reconciliation for Sullivan Company at July 31.Prepare the journal entry (or entries) necessary to bring the Cash in Bank account into agreement with the reconciled cash balance on the bank reconciliation.

Bank reconciliation statement is the statement of business and banking activity which reconciles the…

Answered: On July 31, Sullivan Company’s Cash in…

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter7: Internal Control And Cash

Section: Chapter Questions

Problem 7.3BE

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P7-4A Bank Reconciliation

On July 31, Sullivan Company’s Cash in Bank account had a balance of $ 8, 112.62. On that date, the bank statement indicated a balance of $ 9, 098.55. A comparison of returned checks and bank advices revealed the following:

Deposits in transit July 31, amounted to $3, 358.19.
Outstanding checks July 31 totaled $1, 251.12.
The bank erroneously charged a $215 check of Solomon Company against the Sullivan bank account.
A $15 bank service charge has not yet been recorded by Sullivan Company.
Sullivan neglected to record $3,000 borrowed from the bank on a ten percent six-month note. The bank shows the $3, 000 as a deposit.
Included with the returned checks is a memo indicating that J. Martin’s check for $640 had been returned NSF. Martin, a customer had sent the check to pay an account of $660 less a $20 discount.
Sullivan Company recorded a $107 payment for repairs as $1, 070.

Required:

Prepare a bank reconciliation for Sullivan Company at July 31.
Prepare the journal entry (or entries) necessary to bring the Cash in Bank account into agreement with the reconciled cash balance on the bank reconciliation.

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