The following information pertains to Cullumber Company. 1. Cash balance per bank, July 31, $11,310.
2. July bank service charge not recorded by the depositor $65.
3. Cash balance per books, July 31, $11,440.
4. Deposits in transit, July 31, $4,615.
5. $2,600 collected for Cullumber Company in July by the bank through electronic funds transfer. The accounts receivable collection has not been recorded by Cullumber Company.
6. Outstanding checks, July 31, $1,950.

Required:
Journalize the adjusting entries at July 31 on the books of Cullumber Company.

Dr Bank charge  $65

Cr Cash/Bank account  $65

Being entries to recognize bank charge for the month

Dr Cash/Bank Account  $2,600

Cr Accounts receivable  $2,600

Being entries to recognize settlement of receivable due from Cullumber Company

Explanation:

Considering the transactions

2. July bank service charge not recorded by the depositor $65. - this will be recognized as a debit to bank charges account and a credit to the cash/bank account

4. Deposits in transit, July 31, $4,615. - This would have been recognized in the books but may not have been recorded by the bank hence no entries are required in the books.  

5. $2,600 collected for Cullumber Company in July by the bank through electronic funds transfer. The accounts receivable collection has not been recorded by Cullumber Company. - This will be recognized as a debit to cash/bank account and a credit to receivables

6. Outstanding checks, July 31, $1,950. - This would have been recognized in the books but may not have been recorded by the bank hence no entries are required in the books.

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