Question 4, part 1 and 2

Page 3 N1146101 TESTING YOUR KNOWLEDGE CHAPTER7 4) Adam pany received a bank statement for November, as follows: From: Central Bank, Brooklyn, NY 11201 o: Adams Company, 1652 Bond Street, Brooklyn, NY 11212 DATE Nov 1 BALANCIE $ 8,921.78 CHECKS DEPOSITS S 2,482.53 5,164.78 $ 5,096.12 12.00 SC 17 20 26 30 251.92 1,740.00 CM 4,646.19 197.11 NSF 2,791.24 S 5.794.61 SC Service Charge CM = Credit Memo NSF = Check returned DM Debit Memo The receipt of $1,740 on November 17 was for a $1,725 note collected by the bank, plus $20 current interest, minus a $5 service charge. Information from Adams Company records: CASH DISBURSEMENTS CASH RECEIPTS Check No 155 156 157 158 159 160 November 2,482.53 5,164.78 215.92 623.65 4,646.19 1,838.40 6 $ 5,069.12 2,791.24 1,008.92 29 All receipts were verified twice and confirmed to be correct. The company noted that check # 157 was recorded correctly by the bank; the check was written in payment of an invoice from a supplier of office supplies. Cash balance on November 30 as per company books: $2,819.59 Required: 1) Prepare the bank reconciliation on November 30, for the Adams Company. 2) Prepare the appropriate journal entries that Adams should record as a result of the reconciliation