The following information pertains to Sandhill Company. 1. Cash balance per books, August 31, $7,374.
2. Cash balance per bank, August 31, $7,338.
3. Outstanding checks, August 31, $708.
4. August bank service charge not recorded by the depositor $60.
5. Deposits in transit, August 31, $3,710.
In addition, $3,026 collected for Sandhill Company in August by the bank through electronic funds transfer. The accounts receivable collection has not been recorded Sandhill Company.
1. Prepare a bank reconciliation at August 31, 2022. (List items that increase balance as per bank & books first.)
CULLUMBER COMPANY
Bank Reconciliation
2. Journalize the adjusting entries at August 31 on the books of Cullumber Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date Account Titles and Explanation Debit Credit
July 31 (To record electronic funds transfer received by bank)
July 31 (To record bank service charge)

                              Sandhill Company

                 Bank Reconciliation Statement for August

                                                                                                $

Cash balance per books                                                     7374

Outstanding checks                                                              708

August bank service charge                                                 (60)

Deposits in transit                                                                (3710)

Electronic funds transfer                                                     3026

Balance per bank                                                                7338

Adjusting entries

August bank service charge

Dr Bank charge   $60

Cr Cash account  $60

Being entries to record the bank charge for August

Electronic funds transfer

Dr Cash Account    $3026

Cr  Accounts receivable  $3026

Being entries to record cash received from a customer

Explanation:

The bank reconciliation statement identifies transactions that have been correctly recorded by the bank but are yet to be correctly recorded in the books (if recorded).

Considering the given transactions;

Outstanding checks have been deducted from the cash book but are yet to be deducted from the bank.

The bank charge has been deducted from the bank balance but is yet to be recorded in the cash book.

Deposits in transit has been added to the cash book balance but is yet to be added to the bank balance hence it is deducted from the cash book balance to reconcile it to the bank balance.

Electronic funds transfer has been added to the bank balance and will be added to the cash book balance.

Only the bank charge and electronic transfer are yet to be adjusted for in  the books hence adjusting entries are required for these 2 items.

yes the correct answer was

b.the increased supply will create a surplus.