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ID: 2474195 • Letter: L
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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 S6.738.V0 The bank statement from Zwingle Slate Bank on that dace showed the following balance. A comparison of the details on the hank statement with the details in the Cash account led the following facts. The statement included a debit memo of $40 for the printing of additional company checks. Cash sales of $883.15 on May 12 were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for $933.15. The bank credited Stromberg Company for the correct amount. Outstanding checks at May 31 totaled $276.25. and deposits in transit were 51.880 15. On May 18. the company issued check No. 1181 for $685 to M. Dornbos. on account. The check, which cleared the bank in May was incorrectly journalized and posted by Stromberg Company for $658. A $2,600 note receivable was collected by the bank for Stromberg Company on May 31 plus $110 interest. The bank charged a collection fee of $20. No interest has been accrued on the note Included with the cancelled checks was a check issued by Strongberg Company to P. Jordan for $360 that was incorrectly charged to Stromberg Company by the bank. On May 31. the bank statement showed an NSF charge of $380 for a check issued by Bev Fountain, a customer, to Stromberg Company on account. Instructions Prepare the bank reconciliation at May 31. 2012. Prepare the necessary adjusting entries for Stromberg Company at May 31. 2012.Explanation / Answer
Stromberg Company Journal entry Sr.No. Account title Debit Credit Bank reconciliation statement 1 Bank charges 40 cash 40 Balance as per cash account $6,738.90 (bank charges for printing checks) Add: - outstanding checks $276.25 2 Sales 50 - note receivable with interest $2,710.00 $2,986.25 Cash 50 (cash sales incorrectly recorded now corrected) Less : - Debit memo for printing checks $40.00 3 No journal entry - Cash sales incorrectly recorded $50.00 - Deposits in transit $1,880.15 - check issued to Mr.Dornboss wrongly recorded $27.00 4 Mr.Dornboss 27 - collection fees for note receivable $20.00 Cash 27 - check from Bev fountain recorded as NSF charge $380.00 (check issued wrongly recorded now corrected) -cancelled check of P Jordan incorrectly charged $360.00 $2,757.15 5a Cash 2710 Balance as per bank statement $6,968.00 Note receivable 2600 Interest on note receivable 110 (note receivable credited to bank now recorded) 5b Bank charges 20 Cash 20 (collection fees charged for note receivable recorded) 6 No journal entry 7 No journal entry
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