Rocky Mountain Interiors deposits all cash receipts each Wednesday and Friday in a night depository after banking hours. The data required to reconcile the bank statement as of May 31 have been taken from various documents and records and are reproduced as follows. The sources of the data are printed in capital letters. All checks were written for payments on account.

Instructions
1. Prepare a bank reconciliation as on May 31. If errors in recording deposits or checks are discovered, assume that the errors were made by the company. Assume that all deposits are from cash sales. All checks are written to satisfy accounts payable.
2. Journalize the necessary entries. The accounts have not been closed.
3. What is the amount of cash that should appear on the balance sheet as of May 31?
4. Assume that a canceled check for $1,375 has been incorrectly recorded by the bank as $1,735.
Briefly explain how the error would be included in a bank reconciliation and how it should becorrected.

Transcribed Image Text:

BANK RECONCILIATION PRECEDING MONTH (DATED APRIL 30) Cash balance according to bank statement Add deposit of April 30, not recorded by bank 10,422.80 780.80 11,203.60 Deduct outstanding checks: No. 580 S310.10 85.50 92.50 137.50 No. 602 No. 612 No. 613 Adjusted balance Cash balance according to company's records Deduct service charges Adjusted balance 625.60 $10,578.00 $10,605.70 27.70 S10.578.00 CASH ACCOUNT Balance as of May 1 10,578.00 CHECKS WRITTEN: Number and amount of each check issued in May: Check No. 614 615 616 617 618 619 620 Amount $243.50 350.10 279.90 395.50 435.40 320.10 238.87 Check No 621 622 623 624 625 626 627 Amount 309.50 Void Void 707.01 158.63 550.03 318.73 Check No. 628 629 630 631 632 633 634 Amount 837.70 329.90 882.80 1,081.56 624.00 310.08 303.30 Total amount of checks issued in May $8,676.61 MAY BANK STATEMENT PAGE 1 MEMBER FDIC ACCOUNT NUMBER FROM 5/01/20-TO 5/31/20- BALANCE AMERICAN NATIONAL BANK OF DETROIT DETROIT, MI 48201-2500 (313)555-8547 10,422.80 6,086.35 7,514.1I 9 DEPOSITS 20 WITHDRAWALS ROCKY MOUNTAIN INTERIORS 4 OTHER DEBITS AND CREDITS 5,150.50CR NEW BALANCE 14,145.54 -GHECK8 AND OTHER DEBITS--DEPO8ITS -DATE--BALANCE-. 05/01 05/0 05/0e No.580 310.10 No.612 92.50 No.813 137.30 No.614 243.50 No.815 350.10 No.616 279.90 No.817 395.50 No.618 435.40 No.819320.10 No.620 238.87 No.621 309.50 No.624 707.01 No.625 158.63 No.626 550.0 No.627 318.7 No.629 329.90 No.830 882.80 No.631 1,081.58N8F 225.40 No.832 82.40 No.633 310.08 780.80 569.50 701.80 819.24 380.70 NS 5,000.00 N8 400.00 600.10 10,801.00 10,989.50 11,061.80 11,049.64 11,071.37 15,054.88 14,746.20 14,697.67 12,507.91 12,836.69 13,568.14 14,169.64 14,145.54 05/ 13 05/14 05/14 701.28 731.45 601.50 05/20 05/21 05/24 05/28 05/31 ВС 24.10 OD OVERDRAFT P8-PAYMENT STOPPED BC8ERVICE CHARGE ECERROR CORRECTION N8FNOT 8UFFICIENT FUNDE THE RECONCILENENT OF THIB STATEMENT WITH YOUR RECORDS IB ES8ENTIAL ANY ERROR OR EXCEPTION SHOULD BE REPORTED IMMEDIATELY CASH RECEIPTS FOR MONTH OF MAY $6,630.60 DUPLICATE DEPOSIT TICKETS: Date and amount of each deposit in May: Date Amount Date Amount $580.70 600.10 701.26 Date Amount 731.45 601.50 1,325.05 May 2 $569.50 701.80 819.24 May 12 16 19 May 23 26 31