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E7-6 Sally Rice is unable to reconcile the bank balance at January 31. Sally’s reconciliation is shown here.
Prepare bank reconciliation and adjusting entries.
Cash balance per bank
$3,677.20
Add: NSF check
450.00
Less: Bank service charge
28.00
Adjusted balance per bank
$4,099.20
Cash balance per books
$3,975.20
Less: Deposits in transit
590.00
Add: Outstanding checks
770.00
Adjusted balance per books
$4,155.20
Instructions
(a) What is the proper adjusted cash balance per bank?
(b) What is the proper adjusted cash balance per books?
(c) Prepare the adjusting journal entries necessary to determine the adjusted cash balance per books.
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