P7-5A Prepare a bank reconciliation and adjusting entries. (LO 3), AP Timmins Co
ID: 2518746 • Letter: P
Question
P7-5A Prepare a bank reconciliation and adjusting entries. (LO 3), AP Timmins Company of Emporia. Kansas, spreads herbicides and applies liquid fertilizer for local fanuers. On May 31. 2017, the company's Cash account per its general ledger showed a balance of $6,738.90. The bank statement from Emporia State Bank on that date showed the following balance. EMPORIA STATE BANK Checks and Debits Deposits and Credits Daily Balance 5-31 6.968.00 A comparison of the details on the bank statement with the details in the Cash account revealed the following facts 1. The statement included a debit memo of $40 for the printing of additional company ch 2. Cash sales of $883.15 on May 12 were deposited in the bank. The cash receipts jounal entry and the deposit slip were incorrectly made for $933. 15. The bank checks. Timmins Company for the correct amount. 3. Outstanding checks at May 31 totaled $276.25, and deposits in transit were S1.880.15 4. On May 18, the company issued check No. 1181 for $685 to H Moses, on account. The check which cleared the bunsk in May was incorrectly jourmalized and posted by Timmins Company for $658. S. S2.690 was collected by the bank for Timmins Company ou May 31 through electronic funds transfer 5. Inclhuded with the canceled checks was a cheek i ssued by Tomins Company to C. Pemod for $360 that was incorrectly charged to Timmins Company by the bank 7. On May 31, the bank statement showed an NSF charge of $380 for a check issued by Sara Ballard, a customer, to Timmins Company on aceount Instructions (a) Prepare the bank reconciliation at May 31. 2017. Adjusted cash bal SS 31 90 (b) Prepare the necessary adjusting entries for Timmins Company at May 31. 2017 e hauk recengiliation with theft and internal control deficienciesExplanation / Answer
Answer:
Timmins Company
Bank Reconciliation
May 31, 2017
Cash balance per bank statement
$ 6,968.00
Add:
Depost in transit
$ 1,880.15
Bank error
360.00
2,240.15
9,208.15
Less:
Outstanding checks
276.25
Adjusted cash balance per bank
8,931.90
Cash balance per books
$ 6,738.90
Add:
Collection of Note Receivable
2,690.00
9,428.90
Less:
NSF check
380.00
Error on deposit
50.00
Error in check recording
27.00
Check printing charge
40.00
497.00
Adjusted cash balance per books
8,931.90
May
Description
Debit $
Credit $
31
Accounts Receivable
380.00
Cash
380.00
31
Sales Revenue
50.00
Cash
50.00
31
Accounts Payable
27.00
Cash
27.00
31
Misc Expense
40.00
Cash
40.00
Timmins Company
Bank Reconciliation
May 31, 2017
Cash balance per bank statement
$ 6,968.00
Add:
Depost in transit
$ 1,880.15
Bank error
360.00
2,240.15
9,208.15
Less:
Outstanding checks
276.25
Adjusted cash balance per bank
8,931.90
Cash balance per books
$ 6,738.90
Add:
Collection of Note Receivable
2,690.00
9,428.90
Less:
NSF check
380.00
Error on deposit
50.00
Error in check recording
27.00
Check printing charge
40.00
497.00
Adjusted cash balance per books
8,931.90
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