On August 31, 2021, the general ledger of The Dean Acting Academy shows a balance for cash of $7,874. Cash receipts yet to be deposited into the checking account total $3,268, and checks written by the academy but not yet processed by the bank total $1,355. The company's balance of cash does not reflect a bank service fee of $28 and interest earned on the checking account of $39. These amounts are included in the balance of cash of $5,972 reported by the bank as of the end of August.

Required:1. Prepare a bank reconciliation to calculate the correct ending balance of cash on August 31, 2021.2. Record the necessary entry (ies) to adjust the balance for cash.

Bank Reconciliation Statement

Balance at bank as per the Cash Book (updated) $7,885

Add Unpresented Cheques $1,355

Less Bank Lodgements not yet credited ($3,268)

Balance as per bank statement $5,972

J1

Bank $39 (debit)

Interest Earned $39 (credit)

J2

Bank service fee $28 (debit)

Bank $28 (credit)

Explanation:

Step 1 Bring the Cash Balance in the Cash Book up to date

Debit:

Balance as at August 31, 2021, $7,874

Interest Earned $39

Totals $7,913

Credit:

Bank service fee $28

Balance Up dated (Balancing figure) $7,885

Totals $7,913

Step 2 Prepare the Bank Reconciliation Statement

Bank Reconciliation Statement

Balance at bank as per the Cash Book (updated) $7,885

Add Unpresented Cheques $1,355

Less Bank Lodgements not yet credited ($3,268)

Balance as per bank statement $5,972