You have been asked to help the Rancher Company prepare its bank reconciliation. You examine the business' accounting records and its bank statement at 31 May, and find the following information:

i The Cash account has a balance of \(\$ 7753.24\).

ii The bank statement shows a bank balance of \(\$ 3783.04\).

iii The 31 May cash receipts of \(\$ 4926.18\) were deposited in the bank at the end of that day but were not recorded by the bank until 1 June.

iv Cheques issued and mailed in May but not included among the cheques listed as paid on the bank statement were:

v A bank service charge of \(\$ 27\) for May was deducted on the bank statement.
vi A cheque received from a customer for \(\$ 241\) in payment of her account and deposited by the Rancher Company was returned marked 'NSF' with the bank statement.
vii Interest of \(\$ 25.18\) earned on the business' cheque account was added on the bank statement.
viii The Rancher Company discovered that cheque no. 941, which was correctly written as \(\$ 647.21\) for the May electricity bill, was recorded as \(\$ 627.41\) in the business' accounts.

Required:
a Prepare a bank reconciliation on 31 May.
b Record the appropriate adjustments in the business' accounts. Calculate the ending balance in the Cash account.

Transcribed Image Text:

Cheque No. 949 Cheque No. 957 $518.65 699.95