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Question
The cash account for Santiago Co. on May 31 indicated a balance of $20,915. The March bank statement indicated an ending balance of $25,645. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:
(1) Checks outstanding totaled $5,975.
(2) A deposit of $3,796 had been made too late to appear on the bank statement.
(3) A check for $1,482 returned with the statement had been incorrectly recorded as $482. The check was originally issued to pay on account.
(4) The bank collected $4,515 on a note left for collection of which $515 was interest revenue.
(5) Bank service charges for May amounted to $70.
(6) A check for $894 was returned by the bank because of insufficient funds.
a. Prepare a bank reconciliation as of May 31.
b. Journalize any necessary entries based on the bank reconciliation.
Answer
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