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(ACCT2020) Stromberg Company of Zwingle, Kansas, spreads herbicides and applies liquid fertilizer for local farmers. On May 31, 2012, the company\'s cash account per its general ledger showed a balance of $6,938.37.

     The bank statement from Zwingle State Bank on that date showed the following balance.

ZWINGLE STATE BANK

Checks and Debits           Deposits and Credits      Daily Balance

XXX                                        XXX                        5-31   7,311.47

A comparison of the details on the bank statement with the details in the cash account revealed the following facts.

1.            The statement included a debit memo of $54.60 for the printing of additional company checks.

2.            Cash sales of $833.15 on May 12 were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for $839.15. The bank credited Stromberg Company for the correct amount.

3.            Outstanding checks at May 31 totaled $294.25, and deposits in transit were $1,894.75.

4.            On May 18, the company issued check No. 1181 for $683.00 to M. Dornbos, on account. The check, which cleared the bank in May, was incorrectly journalized and posted by Stromberg Company for $638.00.

5.            A $2,899.47 note receivable was collected by the bank for Stromberg Company on May 31 plus $124.60 interest. The bank charged a collection fee of $20.00. No interest has been accrued on the note.

6.            Included with the cancelled checks was a check issued by Strongberg Company to P. Jordan for $345.40 that was incorrectly charged to Stromberg Company by the bank.

7.            On May 31, the bank statement showed an NSF charge of $579.47 for a check issued by Bev Fountain, a customer, to Stromberg Company on account.

(a)          Complete the bank reconciliation as of May 31, 2012.

(b)          Prepare the necessary adjusting entries at May 31, 2012.

 

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