Reconcile Johnson Company’s book balance of cash with its bank statement cash balance as of August 31, 2020.

  1. On August 31, the company’s Cash account has a $27,497 debit balance, but it’s August bank statement shows a $27,233 cash balance.
  2. Check No. 303 for $1,482 and Check No. 304 for $558 were outstanding on the July 31 bank reconciliation. Check No. 304 is listed with the August canceled checks, but Check No. 303 is not. Also, Check No. 306 for $382 and Check No. 309 for $2,281, both written in August, are not among the canceled checks on the August 31 statement.
  3. In comparing the canceled checks on the bank statement with the entries in the accounting records, it is found that Check No. 305 for August rent was correctly written and drawn for $1,270 but was erroneously entered in the accounting records as $1,250.
  4. A credit memorandum enclosed with the August bank statement indicates the bank collected $8,000 cash on a non-interest-bearing note for Branch, deducted a $45 collection fee, and credited the remainder to its account. Branch had not recorded this event before receiving the statement.
  5. A debit memorandum for $805 lists a $795 NSF check plus a $10 NSF charge. The check had been received from a customer, Evan Shaw. Branch has not yet recorded this check as NSF.
  6. Enclosed with the August statement is a $25 debit memorandum for bank services. It has not yet been recorded because no previous notification had been received.
  7. Branch’s August 31 daily cash receipts of $11,514 were placed in the bank’s night depository on that date, but do not appear on the August 31 bank statement.

Instructions

  1. Prepare the bank reconciliation for this company as of August 31, 2020.
  2. Prepare the journal entries necessary to bring the company’s book balance of cash into conformity with the reconciled cash balance as of August 31, 2020.