Reference no: EM132566617
Question - The Agricultural Genetics Company's Cash account in its general ledger reported a balance of $6,782 on May 31, 2021. The company's bank statement from Western Bank reported a balance of $6,405 on the same date.
Prepare bank reconciliation and related entries.
A comparison of the details in the bank statement with the details in the Cash account revealed the following facts.
1. The bank statement included a debit memo of $40 for bank service charges.
2. Cash sales of $836 on May 18 were deposited in the bank. The journal entry to record the cash sales and the deposit slip to deposit the cash were incorrectly made out for $886. The bank correctly credited Agricultural Genetics Company for the correct amount.
3. The April 30 deposit of $2,190 was included on the May bank statement. The deposit had been placed in the bank's night deposit vault on April 30.
4. The May 31 deposit of $2,416 was not included on the May bank statement. The deposit had been placed in the bank's night deposit vault on May 31.
5. Cheques #928 for $180 and #1014 for $236 were outstanding on April 30. Of these, #928 cleared the bank in May. All of the cheques written in May except for #1127 for $105 and #1195 for $235 had cleared the bank by May 31.
6. On May 18, the company issued cheque #1151 for $685 to L. Kingston, on account. The cheque, which cleared the bank in May, was incorrectly journalized and posted by Agricultural Genetics Company for $658.
7. A review of the bank statement revealed that Agricultural Genetics Company received $2,200 of electronic payments from customers on account in May. The bank had also credited the company's account with $80 of interest revenue on May 31. The bank charged a $20 collection fee. Agricultural Genetics Company had no previous notice of these amounts.
8. On May 31, the bank statement showed an NSF charge of $680 for a cheque issued by Pete Dell, a customer, to Agricultural Genetics Company on account.
Instructions -
a. Make the bank reconciliation at May 31.
b. Make the necessary adjusting entries at May 31.