Check no. 2350 was outstanding from June. The credit memo was for collection of notes receivable. All checks were paid at the correct amount. The debit memo was for printed checks. The June 30 bank reconciliation showed a deposit in transit of $1,101. The unadjusted Cash account balance at July 31 was $14,128. Required a. Prepare the bank reconciliation for Park Valley Spa at the end of July. b. Record in general journal form any necessary entries to the Cash account to adjust it to the true cash balance. Check no. 2350 was outstanding from June. The credit memo was for collection of notes receivable. All checks were paid at the correct amount. The debit memo was for printed checks. The June 30 bank reconciliation showed a deposit in transit of $1,101. The unadjusted Cash account balance at July 31 was $14,128. Required a. Prepare the bank reconciliation for Park Valley Spa at the end of July. b. Record in general journal form any necessary entries to the Cash account to adjust it to the true cash balance.

Solution and Explanation:

                                      PARK VALLEY SPA

                                     Bank Reconciliation

                                        July 31, Year 1

Unadjusted Bank Balance, July 31, Year 1  16591

Add: Deposit in transit                                    3545

Less: Outstanding checks #2353  2899  

Less: Outstanding checks #2356  73             (2972)    

True Cash Balance, July 31, Year 1             $17164

Unadjusted Book Balance, July 31, Year 1  14,132

Add: Credit memo for collection of notes receivable  3049

Less: Debit memo for printed checks                    (17)

True Cash Balance, July 31, Year 1               $17164

Journal entries  

1  Cash                      3049  

            Notes receivable  3049

(For cash received on notes receivable )      

2  Miscellaneous expense  17  

            Cash                                17

(For cash paid for printed checks)

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