On August 31, 2018, the general ledger of The Dean Acting Academy shows a balance for cash of $7,944. Cash receipts yet to be deposited into the checking account total $3,338, and checks written by the academy but not yet processed by the bank total $1,425. The company's balance of cash does not reflect a bank service fee of $35 and interest earned on the checking account of $46. These amounts are included in the balance of cash of $6,042 reported by the bank as of the end of August. 1. Prepare a bank reconciliation to calculate the correct ending balance of cash on August 31, 2018 2. Record the necessary entry (ies) to adjust the balance for cash.

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Business

Messiah Fernandez

9 May, 03:54

On August 31, 2018, the general ledger of The Dean Acting Academy shows a balance for cash of $7,944. Cash receipts yet to be deposited into the checking account total $3,338, and checks written by the academy but not yet processed by the bank total $1,425. The company's balance of cash does not reflect a bank service fee of $35 and interest earned on the checking account of $46. These amounts are included in the balance of cash of $6,042 reported by the bank as of the end of August. 1. Prepare a bank reconciliation to calculate the correct ending balance of cash on August 31, 2018 2. Record the necessary entry (ies) to adjust the balance for cash.

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Richard Horn · Answer 1

The Dean Acting Academy

Bank reconciliation statement

August 31, 2018

Particulars Amount Particulars Amount

Bank cash balance $6,042 Company cash balance $7,944

Deposits in transit $3,338 Interest earned $46

Less: Outstanding Less: service fee - $35

Check - $1,425

Bank balance Company balance

After reconciliation $7,955 After reconciliation $7,955

2. The adjusting entries are

Cash A/c Dr $46

To Interest revenue $46

(Being the interest revenue is recorded)

Bank service fee expense A/c Dr $35

To Cash A/c $35

(Being the service fee expense of bank is recorded)