Andy Electronics Inc. deposits all receipts intact on the day received and
makes all payments by cheque.
On July 31,2023, after all postings was completed, its Cash account
showed an $8,042 debit balance.
However, Andy Electronics Inc’s July 31 bank statement showed only
$9,915 on deposit in the bank on that day along with the following
outstanding cheques:
Chq# 007 for $1,260
Chq# 011 for $95
Chq #019 for $1,340
Bank statement also shows a wire transfer for $3,000 to company’s
account dated July 30, 2023.
Included with the July cancelled cheques returned by the bank was a $42
debit memo for bank services.
Cheque #919, returned with the cancelled cheques, was correctly drawn
for $892 in payment of the utility bill and was paid by the bank on July
15. However, it had been recorded with a debit to Utilities Expense and
a credit to Cash as though it were for $982.
The July 31 cash receipts, $3,925, were placed in the bank’s night
depository after banking hours on that date and were unrecorded by the
bank at the time the July bank statement was prepared.
The bank statement shows $55 of interest earned on one of its Saving
accounts.
Required
a. Prepare a bank reconciliation for Andy Electronics Inc. at July 31,
2023
b. Give the journal entries that Andy Electronics Inc. should make
because of having prepared the bank reconciliation in part (a).