Bank reconciliation-adjusting entries

Assignment Help Accounting Basics

Reference no: EM13256832

On May 31, 2007, Galenti Company had a cash balance per books of$5,681.50. The bank statement from Community Bank on that date showed a balance of $7,964.60. A comparison of the statement with the cash account revealed the following facts.

1. The statement included a debit memo of $70 for the printing of additional company checks.

2. Cash sales of $786.15 on May 12 were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for $796.15. The bank credited Galenti Company forthe correct amount.

3. Outstanding checks at May 31 totaled $806.25, and deposits intransit were $836.15.

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

5. A $3,000 note receivable was collected by the bank for Galenti Company on May 31 plus $80 interest. The bank charged acollection fee of $30. No interest has been accrued on thenote.

6. Included with the cancelled checks was a check issued by Gallen Company to C. Young for $290 that was incorrectly charged to Galenti Company by the bank.

7. On May 31 the bank statement showed an NSF charge of $340 fora check issued by K. Uzong, a customer, to Galenti Company on account.

Instructions

(a) Prepare the bank reconciliation as of May 31, 2007.

(b) Prepare the necessary adjusting entries at May 31, 2007.

Reference no: EM13256832

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