(ACCT2020) Stromberg Company of Zwingle, Kansas, spreads herbicides and applies liquid fertilizer for local farmers. On May 31, 2012, the company\’s cash account per its general ledger showed a balance of $6,938.37.
The bank statement from Zwingle State Bank on that date showed the following balance.
ZWINGLE STATE BANK
Checks and Debits Deposits and Credits Daily Balance
XXX XXX 5-31 7,311.47
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 $54.60 for the printing of additional company checks.
2. Cash sales of $833.15 on May 12 were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for $839.15. The bank credited Stromberg Company for the correct amount.
3. Outstanding checks at May 31 totaled $294.25, and deposits in transit were $1,894.75.
4. On May 18, the company issued check No. 1181 for $683.00 to M. Dornbos, on account. The check, which cleared the bank in May, was incorrectly journalized and posted by Stromberg Company for $638.00.
5. A $2,899.47 note receivable was collected by the bank for Stromberg Company on May 31 plus $124.60 interest. The bank charged a collection fee of $20.00. No interest has been accrued on the note.
6. Included with the cancelled checks was a check issued by Strongberg Company to P. Jordan for $345.40 that was incorrectly charged to Stromberg Company by the bank.
7. On May 31, the bank statement showed an NSF charge of $579.47 for a check issued by Bev Fountain, a customer, to Stromberg Company on account.
(a) Complete the bank reconciliation as of May 31, 2012.
(b) Prepare the necessary adjusting entries at May 31, 2012.
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