The bookkeeper at Washington Company has not reconciled the bank statement with the Cash account, saying, “I don’t have time.” You have been asked to prepare a reconciliation and review the procedures with the bookkeeper. The May 31, Current Year, bank statement and the May ledger account for cash showed the following (summarized):

A comparison of checks written before and during May with the checks cleared through the bank showed outstanding checks at the end of May of $3,400 (including $2,040 written before and $1,360 written during May). No deposits in transit were carried over from March, but a deposit was in transit at the end of May.

Required:
1. Prepare a detailed bank reconciliation for May.
2. Give any required journal entries as a result of the reconciliation. Why are they necessary?
3. What was the beginning balance in the Cash account in the ledger on June 1, current year?
4. What total amount of cash should be reported on the balance sheet at the end of May?

Transcribed Image Text:

Balance, May 1, Current Year Deposits during May Interest collected Checks cleared during May NSF check-B. C. Wong Bank service charges Balance, May 31, Current Year May 1 Balance May Deposits BANK STATEMENT Checks $46,200 240 50 Deposits $37,600 1,240 Cash (A) 25,500 May Checks written 43,200 Balance $32,600 70,200 71,440 25,240 25,000 24,950 24,950 42,500