Problem 7-5A (Part Level Submission) Sunland Company of Emporia, Kansas, spreads
ID: 342054 • Letter: P
Question
Problem 7-5A (Part Level Submission) Sunland 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 $6,823.90. The bank statement from Emporia State Bank on that date showed the following balance EMPORIA STATE BANK Deposits and Credits Daily Balance 5-31 7,053.00 Checks and Debits Xxx A 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 $57.00 for the printing of additional company checks. 2. Cash sales of $900.15 on May 12 were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for $950.15. The bank credited Sunland Company for the correct amount 3. Outstanding checks at May 31 totaled $285.25, and deposits in transit were $1,897.15 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 Sunland Company for $648.00 5. A $2,792.00 note receivable was collected by the bank for Sunland 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 $343.00 that was incorrectly charged to Sunland Company by the bank. 7. On May 31, the bank statement showed an NSF charge of $465.00 for a check issued by Sara Ballard, a customer, to Sunland Company on account.Explanation / Answer
Bank Reconciliation Unadjusted Bank balance 7,053 Add: Deposits in transit 1,897.15 Error by bank in recording cheque 343 2,240.15 9,293 less: outstanding checks 285.25 Adjusted bank balance 9,007.90 Unadjusted cash balance 6,823.90 Add: Note receivable collected 2,792 2,792 9,615.90 less: printing charges 57 Error in recording cash sales 50 Error in recording chq 1181 36 NSF 465 608 Adjusted cash balance 9,007.90