Problem 7-SA (Part Level Submission) Sandhll Co. of Emporia, Kansas, spreads her

Question

Problem 7-SA (Part Level Submission) Sandhll Co. of Emporia, Kansas, spreads herbicides and applies liquild fertilizer for local farmers. On May 31, 2017, the company's Cash account per its general ledger showed a balance of $6,888.90 The bank statement from Emporia State Bank on that date showed the following balance. EMPORIA STATE BANK Checks and DebitsDeposits and Credits Daily Balance 5-31 7,118.00 A comparison of the details on the bank statemient with the details in the Cash account revealed the following facts. 1. The statement included a debit memo of $54.00 for the printing of additional company checks. 2. Cash sales of $897.15 on May 12 were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for $947.15. The bank credited Sandhill Co. for the correct amount. Outstanding checks at May 31 totaled $285.25, and deposits in transit were $1,894.15 4. On May 18, the company issued check No. 1181 for $684.00 to H. Moses, on account. The check, which cleared the bank in May, was incorrectly journalized and posted by Sandhill Co. for $648.00 5. A $2,854.00 note receivable was collected by the bank for Sandhill Co. on May 31 through electronic funds transfer. 6. Included with the canceled checks was a check issued by Tomins Company to C. Pernod for $346.00 that was incorrectly charged to Sandhill Co. by the bank. 7. On May 31, the bank statement showed an NSF charge of $530.00 for a check issued by Sara Ballard, a customer, to Sandhill Co. on account.

Explanation / Answer

Bank Reconciliation Unadjusted Bank balance 7,118 Add: Deposits in transit 1,894.15 Error by bank in recording cheque 346 2,240.15 9,358 less: outstanding checks 285.25 Adjusted bank balance 9,072.90 Unadjusted cash balance 6,888.90 Add: Note receivable collected 2,854 2,854 9,742.90 less: printing charges 54 Error in recording cash sales 50 Error in recording chq 1181 36 NSF 530 670 Adjusted cash balance 9,072.90

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