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Murad Co. Ltd. bank statement for May 2017 shows the following data. Balance 1/5 $126,500 Balance 31/5 $142,800 Debit memorandum: NSF check $1,750 Credit memorandum: Collection of note receivable $5,050 The cash balance per books at May 31 is $133,190. Your review of the data reveals the following. 1. The NSF check was from Saeed Co., a customer. 2. The note collected by the bank was a $5,000, 3-month, 12% note. The bank charged a $100 collection fee. No interest has been accrued. 3. Outstanding checks at May 31 total $24,100. 4. Deposits in transit at May 31 total $17,520. 5. A Murad Co Ltd. check for $3,520, dated May 10, cleared the bank on May 25. The company recorded this check, which was a payment on account, for $3,250. Required: (a) Prepare a bank reconciliation at May 31. (b) Journalize the entries required by the reconciliation.

Murad Co. Ltd. bank statement for May 2017 shows the following data. Balance 1/5 $126,500 Balance 31/5 $142,800 Debit memorandum: NSF check $1,750 Credit memorandum: Collection of note receivable $5,050 The cash balance per books at May 31 is $133,190. Your review of the data reveals the following. 1. The NSF check was from Saeed Co., a customer. 2. The note collected by the bank was a $5,000, 3-month, 12% note. The bank charged a $100 collection fee. No interest has been accrued. 3. Outstanding checks at May 31 total $24,100. 4. Deposits in transit at May 31 total $17,520. 5. A Murad Co Ltd. check for $3,520, dated May 10, cleared the bank on May 25. The company recorded this check, which was a payment on account, for $3,250. Required: (a) Prepare a bank reconciliation at May 31. (b) Journalize the entries required by the reconciliation.

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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Murad Co. Ltd. bank statement for May 2017 shows the following data. Balance 1/5 $126,500 Balance 31 /5 $142,800 Debit memorandum: NSF check $1,750 Credit memorandum: Collection of note receivable $5,050 The cash balance per books at May 31 is $133,190. Your review of the data reveals the following. 1. The NSF check was from Saeed Co., a customer. 2. The note collected by the bank was a $5,000, 3-month, 12% note. The bank charged a $100 collection fee. No interest has been accrued. 3. Outstanding checks at May 31 total $24,100. 4. Deposits in transit at May 31 total $17,520. 5. A Murad Co Ltd. check for $3,520, dated May 10, cleared the bank on May 25. The company recorded this check, which was a payment on account, for $3,250. Required: (a) Prepare a bank reconciliation at May 31. (b) Journalize the entries required by the reconciliation.
Transcribed Image Text:Murad Co. Ltd. bank statement for May 2017 shows the following data. Balance 1/5 $126,500 Balance 31 /5 $142,800 Debit memorandum: NSF check $1,750 Credit memorandum: Collection of note receivable $5,050 The cash balance per books at May 31 is $133,190. Your review of the data reveals the following. 1. The NSF check was from Saeed Co., a customer. 2. The note collected by the bank was a $5,000, 3-month, 12% note. The bank charged a $100 collection fee. No interest has been accrued. 3. Outstanding checks at May 31 total $24,100. 4. Deposits in transit at May 31 total $17,520. 5. A Murad Co Ltd. check for $3,520, dated May 10, cleared the bank on May 25. The company recorded this check, which was a payment on account, for $3,250. Required: (a) Prepare a bank reconciliation at May 31. (b) Journalize the entries required by the reconciliation.
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