Reference no: EM132830013
Question - When the accountant of Sheridan Company prepared the bank reconciliation on May 31, 2021, there were three outstanding cheques: #690 for $296, #693 for $166, and #694 for $256. There were no deposits in transit as at May 31, 2021. The bank balance at May 31 was $17,624. The balance in the Cash account on the May 31, 2021, adjusted trial balance was $16,906. The following is selected information from the June bank statement:
Cheques Cleared
|
Date
|
Cheque No.
|
Amount
|
|
June 1
|
690
|
$296
|
|
June 5
|
709
|
3,246
|
|
June 6
|
693
|
166
|
|
June 13
|
710
|
1,476
|
|
June 20
|
712
|
4,355
|
|
June 23
|
119
|
456
|
|
June 24
|
711
|
1,776
|
Other Bank Account Transactions
|
Date
|
Amount
|
Transaction
|
|
June 3
|
$3,306
|
Deposit
|
|
June 10
|
5,366
|
Deposit
|
|
June 17
|
3,280
|
Deposit
|
|
June 24
|
2,127
|
Deposit
|
|
June 25
|
-162
|
NSF cheque
|
|
June 27
|
-486
|
EFT insurance payment
|
|
June 30
|
-12
|
Service charge
|
|
June 30
|
31
|
Interest
|
The NSF cheque was originally received from a customer, Massif Co., in payment of its account of $151. The bank included a $11 service charge for a total of $162. Information from the company's accounting records follows:
Cash Receipts
|
Date
|
Amount
|
|
June 2
|
$3,306
|
|
June 9
|
5,366
|
|
June 16
|
3,820
|
|
June 23
|
2,127
|
|
June 30
|
3,106
|
Cash Payments
|
Date
|
Cheque No.
|
Amount
|
|
June 5
|
708
|
$2,896
|
|
June 5
|
709
|
3,246
|
|
June 19
|
711
|
1,776
|
|
June 19
|
712
|
4,535
|
|
June 27
|
713
|
3,046
|
|
June 27
|
714
|
3,846
|
Investigation reveals that cheque #712 was issued to purchase equipment and cheque #710 was issued to pay an account payable. All deposits are for collections of accounts receivable. The bank made one error: cheque #119 for Sheridan Co. Ltd. was charged to Sheridan's bank account. The company's policy is to pass on all NSF service charges to the customer.
Required -
a) Calculate the balance per bank statement at June 30 and the unadjusted Cash balance per company records at June 30.
b) Prepare bank reconciliation at June 30.
c) Prepare the necessary adjusting entries at June 30. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
d) What balance would Sheridan Company report as cash in the current assets section of its balance sheet on June 30, 2021?