Question

The following data were accumulated for use in reconciling the bank account of Mathers Co. for July:

1. Cash balance according to the company's records at July 31, $32,110.
2. Cash balance according to the bank statement at July 31, $31,350.
3. Checks outstanding, $2,870.
4. Deposit in transit, not recorded by bank, $4,150.
5. A check for $170 in payment of an account was erroneously recorded in the check register as $710.
6. Bank debit memo for service charges, $20.
Required:
a. Journalize the entries that should be made by the company.

Answer 1

Answer and Explanation:

The journal entries are shown below:

For the month of July

Cash $540 $710 - $170)

To Accounts Payable $540

(Being the payment received is recorded)

Bank service charges $20

To Cash $20

(Being the service charges is paid for cash is recorded)

Only these two entries are recorded

All other transactions are to be ignored