On May 31, Sosa Company had a cash balance per books of $6,781.50. The bank stat

Question

On May 31, Sosa Company had a cash balance per books of $6,781.50. The bank statement from Sandwich Community Bank on that date showed a balance of $6,804.60. A comparison of the statement with the cash account revealed the following facts:

1.    The statement included a debit memo of $40 for the printing of additional company checks.

2.    Cash sales of $836.15 on May 12 were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for $846.15. The bank credited Sosa Company for the correct amount.

3.    Outstanding checks at May 12 totaled $276.25. Deposits in transit were $1,936.15.

4.    On May 18, the company issued check No.1181 for $685 to Kap Shin, on account. The check, which cleared the bank in May, was incorrectly journalized and posted by Sosa Company for $658.

5.    A $3,000 note receivable was collected by the bank for Sosa Company on May 31 plus $80 interest. The bank charged a collection fee of $20. No interest has been accrued on the note.

6.    Included with the cancelled checks was a check issued by Tacamoto Company to Yee Chow for $600 that was incorrectly charged to Sosa Company by the bank.

7.    On May 31, the bank statement showed an NSF charge of $700 for a check issued by John Lewis, a customer, to Sosa Company on account.

Instructions:

(a) Prepare the bank reconciliation at May 31.

Explanation / Answer

BANK BALANCE AS PER CASH BOOK = 6781.50

ADJUSTMENS:-

LESS:-DEBIT MEMO FOR PRINTING ADDITIONAL CHEQUES = (40)

LESS:-INCORRECT JORNAL ENTRY OF DEPOSIT MADE[846.15-836.15] = (10)

ADD:-OUTSTANDING CHEQUES = 276.25

LESS:-DEPOSITS IN TRANSIT = (1936.15)

LESS:-INCORRECT JPURANAL ENTRY OF CHEQUE PAYMENT MADE [685-658] = (27)

ADD:-NOT E RECIEVABLE COLLECTED BY THE BANK = 3000

ADD:-INTEREST ON NOTES RECIEVABLE COLLECTED BY BANK = 80

LESS:-BANK COLLECTION CHARGES = (20)

LESS:-INCORRECT CHARGES BY YJE BANK = (600)

LES;-NSF CHARGES = (700)

BANK BALANCE AS PER BANK STATEMENT = 6804.60

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