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as per com cords Community Bank on that date showed a credit balance of $15 569.20. A comparison of the statement with the cash account revealed the following facts. 1. The statement included a debit entry of $120 for the bank's annual service fee. 2. Cash sales of $1672.30 on 12 May were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for $1692.30. The bank credited Pot Plants Ltd for the correct amount. 3. Outstanding EFTs at 31 May totalled $2552.50, and outstanding deposits were $1672.30.

as per com cords Community Bank on that date showed a credit balance of $15 569.20. A comparison of the statement with the cash account revealed the following facts. 1. The statement included a debit entry of $120 for the bank's annual service fee. 2. Cash sales of $1672.30 on 12 May were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for $1692.30. The bank credited Pot Plants Ltd for the correct amount. 3. Outstanding EFTs at 31 May totalled $2552.50, and outstanding deposits were $1672.30.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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PSB7.5 Prepare bank reconciliation statement and adjusting entries. On 31 May 2023 Pot Plants Ltd had a cash balance as per company records of $10 949 debit. The bank statement from Community Bank on that date showed a credit balance of $15 569.20. A comparison of the statement with the cash account revealed the following facts. LO4 1. The statement included a debit entry of $120 for the bank's annual service fee. 2. Cash sales of $1672.30 on 12 May were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for $1692.30. The bank credited Pot Plants Ltd for the correct amount. 3. Outstanding EFTs at 31 May totalled $2552.50, and outstanding deposits were $1672.30. 4. On 18 May Pot Plants Ltd authorised an EFT (ref no. 1181) for $1370 to M. Helms on account. The EFT, which was processed by the bank in May, was incorrectly journalised and posted by Pot Plants Ltd for $1730. 5. A $6000 note receivable was collected by the bank for Pot Plants Ltd on 31 May plus $160 interest. The bank charged a collection fee of $40. No interest has been accrued on the note. 6. On 31 May, the bank informed Pot Plants Ltd that they had been incorrectly charged $1200 by the bank. This amount will be added back to Pot Plants Ltd's account on 1 June. 7. On 31 May the bank statement showed a reversal entry of $1400 that was originally deposited by W. Hoad, a customer, to Pot Plants Ltd. Required (a) Prepare the bank reconciliation as at 31 May 2023. (b) Prepare the necessary adjusting entries as at 31 May 2023.
Transcribed Image Text:PSB7.5 Prepare bank reconciliation statement and adjusting entries. On 31 May 2023 Pot Plants Ltd had a cash balance as per company records of $10 949 debit. The bank statement from Community Bank on that date showed a credit balance of $15 569.20. A comparison of the statement with the cash account revealed the following facts. LO4 1. The statement included a debit entry of $120 for the bank's annual service fee. 2. Cash sales of $1672.30 on 12 May were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for $1692.30. The bank credited Pot Plants Ltd for the correct amount. 3. Outstanding EFTs at 31 May totalled $2552.50, and outstanding deposits were $1672.30. 4. On 18 May Pot Plants Ltd authorised an EFT (ref no. 1181) for $1370 to M. Helms on account. The EFT, which was processed by the bank in May, was incorrectly journalised and posted by Pot Plants Ltd for $1730. 5. A $6000 note receivable was collected by the bank for Pot Plants Ltd on 31 May plus $160 interest. The bank charged a collection fee of $40. No interest has been accrued on the note. 6. On 31 May, the bank informed Pot Plants Ltd that they had been incorrectly charged $1200 by the bank. This amount will be added back to Pot Plants Ltd's account on 1 June. 7. On 31 May the bank statement showed a reversal entry of $1400 that was originally deposited by W. Hoad, a customer, to Pot Plants Ltd. Required (a) Prepare the bank reconciliation as at 31 May 2023. (b) Prepare the necessary adjusting entries as at 31 May 2023.
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