Problem 3-7

Sept. 30 Receipts Disbursements Oct. 31

Book balance 1,900,000 1,400,000 2,400,000 900,000
NSF check
September 30 (60,000) (60,000)
October 31 40,000 (40,000)
Collection of accounts receivable
September 30 30,000 (30,000)
October 31 50,000 50,000
Overstatement of check
September 30 90,000 (90,000)
October 31 (120,000) 120,000
Adjusted book balance 1,960,000 1,330,000 2,260,000 1,030,000

Bank balance 2,100,000 1,200,000 2,500,000 800,000

Deposit in transit
September 30 130,000 (130,000)
October 31 260,000 260,000
Outstanding checks
September 30 (270,000) (270,000)
October 31 30,000 (30,000)
Adjusted bank balance 1,960,000 1,330,000 2,260,000 1,030,000

Adjusting entries on October 31

Accounts receivable 40,000

Cash in bank 40,000

Cash in bank 170,000

Accounts receivable 50,000
Salaries 120,000