Problem 7-5A EMPORIA STATE BANK Checks and Debits Deposits and Credits Daily Bal
ID: 2549190 • Letter: P
Question
Problem 7-5A
EMPORIA STATE BANK
Checks and Debits
Deposits and Credits
Daily Balance
On May 31, the bank statement showed an NSF charge of $485.00 for a check issued by Sara Ballard, a customer, to Blossom Company on account
Prepare the bank reconciliation at May 31, 2017. (List items that increase balance as per bank & books first.)
Prepare the necessary adjusting entries for Blossom Company at May 31, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Problem 7-5A: Account titles to use
Problem 7-5A
Blossom Company of Emporia, Kansas, spreads herbicides and applies liquid fertilizer for local farmers. On May 31, 2017, the company’s Cash account per its general ledger showed a balance of $6,843.90.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
XXX XXX 5-31 7,073.00A 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 $61.00 for the printing of additional company checks. 2. Cash sales of $904.15 on May 12 were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for $954.15. The bank credited Blossom Company for the correct amount. 3. Outstanding checks at May 31 totaled $276.25, and deposits in transit were $1,901.15. 4. On May 18, the company issued check No. 1181 for $685.00 to H. Moses, on account. The check, which cleared the bank in May, was incorrectly journalized and posted by Blossom Company for $658.00. 5. A $2,816.00 note receivable was collected by the bank for Blossom Company on May 31 through electronic funds transfer. 6. Included with the canceled checks was a check issued by Tomins Company to C. Pernod for $339.00 that was incorrectly charged to Blossom Company by the bank. 7. On May 31, the bank statement showed an NSF charge of $485.00 for a check issued by Sara Ballard, a customer, to Blossom Company on account.
Explanation / Answer
Prepare the bank reconciliation at May 31, 2017:
Cash balance per bank statement
7,073.00
Add:
Deposit in transit
1,901.15
Bank error- Tomins
339.00
2,240.15
9,313.15
Less: Outstanding checks
(276.25)
Adjusted cash balance per cash
9,036.90
Cash balance per books
6,843.90
Add: Electronic fund transfer received
2,816.00
Less:
NSF check
(485.00)
Check printing charges
(61.00)
Error in deposit (954.15-904.15)
(50.00)
Error in recording check (685-658)
(27.00)
(623.00)
Adjusted cash balance per book
9,036.90
Prepare the necessary adjusting entries for Blossom Company at May 31, 2017:
Date
Account title
Debit
Credit
31-May
Cash
2,816.00
Accounts receivable
2,816.00
31-May
Accounts receivable
485.00
Cash
485.00
31-May
Sales revenue
50.00
Cash
50.00
31-May
Accounts payable
27.00
Cash
27.00
31-May
Bank charges expenses
61.00
Cash
61.00
Cash balance per bank statement
7,073.00
Add:
Deposit in transit
1,901.15
Bank error- Tomins
339.00
2,240.15
9,313.15
Less: Outstanding checks
(276.25)
Adjusted cash balance per cash
9,036.90