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.)
Journalize 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.