Weave Company received a bank statement for the month of August. The bank statement showed the following information:
Balance 1 August $68,326
Deposits 45,300
Cheques processed (63,222)
Service charges (50)
Monthly deposit into saving account directly (26,120)
Deducted by bank from account (780)
Balance, 31st August $49,574
Weave Co’s general ledger account had a balance of $78,304 at the end of August.
(i) Deposits shown in the general ledger account but not in the bank amounting to $8,200;
(ii) all cheques written by the company were processed by the bank except for those totaling $8,420;
(iii) A $2,000 cheque to a supplier correctly recorded by the bank but was incorrectly recorded by the company as $200 credit to cash.
Required:
1. Prepare a bank reconciliation statement for the month of August.
2. Prepare the necessary journal entries at the end of August to adjust the general ledger cash account.