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Bank Reconciliation and Entries

Sunshine Interiors deposits all cash receipts each Wednesday and Friday in a night depository, after banking hours. The data required to reconcile the bank statement as of July 31, 20Y0, have been taken from various documents and records and are reproduced as follows. The sources of the data are printed in capital letters. All checks were written for payments on account.

CASH ACCOUNT:
Balance as of July 1			$9,579.00
CASH RECEIPTS FOR MONTH OF JULY			6,466.42

DUPLICATE DEPOSIT TICKETS:
Date and amount of each deposit in July:
Date		Amount		Date		Amount		Date		Amount
July 2		$569.50		July 12		$580.70		July 23		$714.45
5		701.80		16		600.10		26		601.50
9		819.24		19		701.26		31		1,177.87

CHECKS WRITTEN:
Number and amount of each check issued in July:
Check No.		Amount		Check No.		Amount		Check No.		Amount
614		$243.50		621		$309.50		628		$837.70
615		350.10		622		Void		629		329.90
616		279.90		623		Void		630		882.80
617		395.50		624		707.01		631		1,081.56
618		435.40		625		158.63		632		325.40
619		320.10		626		550.03		633		310.08
620		238.87		627		391.73		634		241.71
Total amount of checks issued in July										$8,389.42

BANK RECONCILIATION FOR PRECEDING MONTH:

Sunshine Interiors
Bank Reconciliation
June 30, 20Y0
Cash balance according to bank statement				$9,423.70
Add: Deposit of June 30 not recorded by bank				$780.80
Deduct: Outstanding Check No. 580		($310.10)
Outstanding Check No. 602		(85.50)
Outstanding Check No. 612		(92.50)
Outstanding Check No. 613		(137.40)
Total deductions				(625.50)
Adjusted balance				$9,579.00
Cash balance according to company's records				$9,606.70
Deduct: Bank service charges				(27.70)
Adjusted balance				$9,579.00

JULY BANK STATEMENT:

MEMBER FDIC							PAGE 1
AMERICAN NATIONAL BANK OF DETROIT						ACCOUNT NUMBER
						FROM 7/01/20Y0	TO 7/31/20Y0
DETROIT, MI 48201-2500 (313) 933-8547						BALANCE	9,423.70
					9	DEPOSITS	6,096.35
					20	WITHDRAWALS	7,657.74
SUNSHINE INTERIORS					4	OTHER DEBITS AND CREDITS	3,749.00CR
						NEW BALANCE	11,611.31

CHECKS AND OTHER DEBITS					DEPOSITS	DATE	BALANCE
No. 580	310.10	No. 612	92.50		780.80	07/01	9,801.90
No. 602	85.50	No. 614	243.50		569.50	07/03	10,042.40
No. 615	350.10	No. 616	279.90		701.80	07/06	10,114.20
No. 617	395.50	No. 618	435.40		819.24	07/11	10,102.54
No. 619	320.10	No. 620	238.87		580.70	07/13	10,124.27
No. 621	309.50	No. 624	707.01		MS 4,000.00	07/14	13,107.76
No. 625	158.63	No. 626	550.03		MS 160.00	07/14	12,559.10
No. 627	319.73	No. 629	329.90		600.10	07/17	12,509.57
No. 630	882.80	No. 631	1,081.56	NSF 375.00		07/20	10,170.21
No. 632	325.40	No. 634	241.71		701.26	07/21	10,304.36
					741.45	07/24	11,045.81
					601.50	07/28	11,647.31
		SC	36.00			07/31	11,611.31

EC ERROR CORRECTION					OD OVERDRAFT
MS MISCELLANEOUS					PS PAYMENT STOPPED
NSF NOT SUFFICIENT FUNDS					SC SERVICE CHARGE
THE RECONCILEMENT OF THIS STATEMENT WITH YOUR RECORDS IS ESSENTIAL.
ANY ERROR OR EXCEPTION SHOULD BE REPORTED IMMEDIATELY.

Required:

Prepare a bank reconciliation as of July 31, 20Y0. If errors in recording deposits or checks are discovered, assume that the errors were made by the company. Assume that all deposits are from cash sales. All checks are written to satisfy accounts payable. When required, enter amounts in dollars and cents.

Sunshine Interiors
Bank Reconciliation
July 31, 20Y0
Cash balance according to bank statement		$____________
Add: Deposit in transit on July 31		1177.87
Deduct: Outstanding Check no. 613	$137.40
Deduct: Outstanding Check No. 628	837.70
Deduct: Outstanding Check No. 633	310.08
Total deductions		1285.18
Adjusted balance		$____________
Cash balance according to company's records		$___________
Add: Note collected by bank, including $160.00 interest	$__________
Add: Error in recording July 23 deposit	__________
Add: Error in recording Check No. 627	__________
Total additions		____________
Deduct: Check returned because of insufficient funds	$375
Deduct: Bank service charges	36
Total deductions		411
Adjusted balance		$____________

2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. When required, enter amounts in dollars and cents. If an amount box does not require an entry, leave it blank.

a. 20Y0 July 31	Cash	__________
	Notes Receivable		4000
	Interest Revenue		160
	Sales		_________
	Accounts Payable		_________
b. July 31	Accounts Receivable	375
	Miscellaneous Expense	36
	Cash		411

3. What is the amount of cash that should appear on the balance sheet as of July 31, 20Y0? $______________

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