Prepare the necessary adjusting entries on august

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Reference no: EM133161229

Question - On August 31, 2021, Crane Company had a cash balance per its books of $27,510. The bank statement on that date showed a balance of $17,720. A comparison of the bank statement with the Cash account revealed the following.

1. The August 31 deposit of $17,310 was not included on the August bank statement.

2. The bank statement shows that Crane received EFT deposits from customers on account totalling $2,500 in August. Crane has not recorded any of these amounts.

3. Cheque #673 for $1,220 was outstanding on July 31. It did not clear the bank account in August. All of the cheques written in August have cleared the bank by August 31, except for cheque #710 for $2,420, and #712 for $2,180.

4. The bank statement showed on August 29 an NSF charge of $766 for a cheque issued by R. Dubai, a customer, in payment of their account. This amount included an $8 service charge by Crane's bank. The company's policy is to pass on all NSF service charges to the customer.

5. Bank service charges of $25 were included on the August statement.

6. The bank recorded cheque #705 for $112 as $121. The cheque had been issued to pay for freight out on a sale. Crane had correctly recorded the cheque.

Required -

a) Make a bank reconciliation at August 31.

b) Prepare the necessary adjusting entries on August 31.

Reference no: EM133161229

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