Blossom Company of Emporia, Kansas, spreads herbicides and applies liquid fertil
ID: 342290 • Letter: B
Question
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 $6,898.90 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 5-31 7,128.00 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 $56.00 for the printing of additional company checks 2. Cash sales of $899.15 on May 12 were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for $949.15. The bank credited Blossom Company for the correct amount. 3. Outstanding checks at May 31 totaled $294.25, and deposits in transit were $1,896.15 4. On May 18, the company issued check No. 1181 for $683.00 to H. Moses, on account. The check, which cleared the bank in May, was incorrectly journalized and posted by Blossom Company for $638.00 5. A $2,866.00 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 $344.00 that was incorrectly charged to Blossom Company by the bank. 7. On May 31, the bank statement showed an NSF charge of $540.00 for a check issued by Sara Ballard, a customer, to Blossom Company on account. (a) Prepare the bank reconciliation at May 31, 2017. (List items that increase balance as per bank & books first. BLOSSOM COMPANY Bank ReconciliationExplanation / Answer
Bank Reconciliation Amount Amount Unadjusted bank balance 7128 Add: Bank Error 344 Deposit in transit 1896.15 2240.15 9368.15 Less: Check Outstanding -294.25 Adjusted Bank Balance 9073.9 Bank Reconciliation Amount Amount Unadjusted Cash Balance 6898.9 Add: Notes Receivable 2866 9764.9 Less: printing Charges 56 Cash Sales error 50 Cheque Error 45 NSF charges 540 -691 9073.9