HCS 380 week 4 Exercise 7-11

Exercise 7-11

Marin Inc.’s bank statement from Main Street Bank at August 31, 2017, gives the following information.

Balance, August 1   $18,580   Bank debit memorandum:    
August deposits   71,180   Safety deposit box fee   $ 90
Checks cleared in August   68,613   Service charge   115
Bank credit memorandum:       Balance, August 31   21,052
  Interest earned   110        

A summary of the Cash account in the ledger for August shows the following: balance, August 1, $18,880; receipts $74,180; disbursements $73,505; and balance, August 31, $19,555. Analysis reveals that the only reconciling items on the July 31 bank reconciliation were a deposit in transit for $4,865 and outstanding checks of $4,565. In addition, you determine that there was an error involving a company check drawn in August: A check for $400 to a creditor on account that cleared the bank in August was journalized and posted for $40.

Deposits in transit 7865

Determine outstanding checks. 9817

Prepare a bank reconciliation at August 31. (List items that increase balance as per bank & books first.)

HCS 380 week 4 Exercise 7-11Journalize the adjusting entries to be made by Marin Inc. at August 31. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Do It! Review 7-1

Identify which control activity is violated in each of the following situations.