Explain how the adjustments described above affect the cash account. 1 answer below »

Bank reconciliation and adjustments to the Cash account

The following information is available for River Bed Hotel for July 2010. Bolta Vista, NV 10001

State Bank

Bank Statement River Bed Hotel

10 Main Street

Bolta Vista, NV 10001 Account number

12-4567

July 31, 2010

Bolta Vista, NV 10001

Account number

12-4567

July 31, 2010

Beginning balance 6/30/2010

$ 9,031

Total deposits and other credits

28,900

Total checks and other debits

23,902

Ending balance 7/31/2010

14,029

Checks and Debits

Deposits and Credits

Check No.

Amount

Date

Amount

2350

$3,761

July

1

$1,102

2351

1,643

July

10

6,498

2352

8,000

July

15

4,929

2354

2,894

July

21

6,174

2355

1,401

July

26

5,963

2357

6,187

July

30

2,084

DM

16

CM

2,150

The following is a list of checks and deposits recorded on the books of the River Bed Hotel for July 2010.

Date

Check No.

Amount of Check

Date

Amount of Deposit

July

2

2351

$1,643

July

8

$6,498

July

4

2352

8,000

July

14

4,929

July

10

2353

1,700

July

21

6,174

July

10

2354

2,894

July

26

5,963

July

15

2355

1,401

July

29

2,084

July

20

2356

950

July

30

3,550

July

22

2357

6,187

Other Information

1. Check no. 2350 was outstanding from June.

2. Credit memo was for collection of notes receivable.

3. All checks were paid at the correct amount.

4. Debit memo was for printed checks.

5. The June 30 bank reconciliation showed a deposit in transit of $1,102.

6. The unadjusted Cash account balance at July 31 was $12,795.

Required

a. Prepare the bank reconciliation for River Bed Hotel at the end of July.

b. Explain how the adjustments described above affect the cash account.

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