The following information relates to Liberty Limited's Cash account. The reconciled cash balance from June's bank reconciliation is $18,920. During the month of July, Liberty recorded cash receipts of $21.700 and cash payments of $24,300 in the general ledger Cash account.
An examination of the company's July bank statement shows a balance of $19,260 on July 31; outstanding cheques $3,630; deposits in transit $1,450; EFT collections on account that were not yet recorded on the books $2,170; NSF cheque $1,270; NSF fee $50; and bank service charges $90.
Instructions
a. Calculate Liberty's cash balance per books at July 31, immediately prior to preparing the July bank reconciliation. Show clear solution. b: Prepare the bank reconciliation at July 31. c. Prepare the necessary journal entries required on July 31 for Liberty.