On August 1, 2019, the accountant for Western Imports downloaded the company's July 31, 2019. Bank statement from the bank?s Website. The balance shown on the bank statement was $28,750. The July 31, 2019, balance in the Cash account in the general ledger was $14,183. Jenny Irvine, the accountant for Western Imports, noted the following differences between the bank's records and the company's Cash account in the general ledger:
a. An electronic funds transfer for $14,300 from Foncier Ricard, a customer located in France, was received by the bank on July 31.
b. Check 1422 was correctly written and recorded for $1,200. The bank mistakenly paid the check for $1,240.
c. The accounting records indicate that Check 1425 was issued for $69 to make a purchase of supplies. However, the examination of the check online showed that the actual amount of the check was for $99.
d. A deposit of $790 made after banking hours on July 31 did not appear on the July 31 bank statement.
e. The following checks were outstanding: Check 1429 for $1,248, and Check 1430 for $140.
f. Automatic debit of $261 on July 31 from Central Common for telephone service appeared on the bank statement but had not been recorded in the company's accounting records.
Required:
1. Prepare a bank reconciliation for the firm as of July 31.
2. Record general journal entries for the items on the bank reconciliation that must be journalized.

Required 1.

Bank Reconciliation Statement as at 31 July

Balance at bank as per updated Cash Book           $28,192

Add Unpresented Cheques

Check 1429                                                 $1,248

Check 1430                                                    $140      $1,388

Less Lodgements not yet credited                             ($790)

Balance as per Bank Statement                              $28,790

Required 2.

Journal Entries :

J1

Cash $14,300 (debit)

Accounts Receivable : Foncier Ricard $14,300 (credit)

J2

Accounts Payable : Central Common $261 (debit)

Cash $261 (credit)

J3

Check 1425 $30 (debit)

Cash $30 (credit)

Explanation:

The first step is to update the Cash Book Bank Balance as follows :

Debit :

Balance as at July 31                                                    $14,183

Credit Transfer : Foncier Ricard                                 $14,300

Totals                                                                           $28,483

Credit:

Check 1425 understated ($99 - $69)                               $30

Direct Debit : Central Common                                       $261

Cash Book Updated Balance (Balancing figure)       $28,192

Totals                                                                           $28,483

Then prepare a Bank Reconciliation Statement as at 31 July :

Bank Reconciliation Statement as at 31 July

Balance at bank as per updated Cash Book           $28,192

Add Unpresented Cheques

Check 1429                                                 $1,248

Check 1430                                                    $140      $1,388

Less Lodgements not yet credited                             ($790)

Balance as per Bank Statement                              $28,790

Journal Entries :

J1

Cash $14,300 (debit)

Accounts Receivable : Foncier Ricard $14,300 (credit)

J2

Accounts Payable : Central Common $261 (debit)

Cash $261 (credit)

J3

Check 1425 $30 (debit)

Cash $30 (credit)

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