Reference no: EM132672476

Harrison Company maintains a checking account at the First National City Bank. The bank provides a bank statement along with canceled checks on the last day of each month. The July 2021 bank statement included the following information:

Balance, July 1, 2021          $56,053

Deposits                           179,800

Checks processed                (192,910)

Service charges                      (45)

NSF checks                                (1,350)

Monthly payment on note, deducted directly by bank from account (includes $570 in interest) (3,470)

Balance, July 31, 2021                 $38,078

The company's general ledger account had a balance of $39,428 at the end of July. Deposits outstanding totaled $6,600 and all checks written by the company were processed by the bank except for those totaling $8,450. In addition, a $2,300 July deposit from a credit customer was recorded as a $230 debit to cash and credit to accounts receivable, and a check correctly recorded by the company as a $45 disbursement was incorrectly processed by the bank as a $450 disbursement.

Required:

Problem 1. Prepare bank reconciliation for the month of July.

Problem 2. Prepare the necessary journal entries at the end of July to adjust the general ledger cash account.