Question

Timmins Company of Emporia, Kansas, spreads herbicides and applies liquid fertilizer for local farmers. On May 31, 2020, the company’s Cash account per its general ledger showed a balance of $7,206.00.
The bank statement from Emporia State Bank on that date showed the following balance.

Emporia State Bank
Checks and Debits		Deposits and Credits		Daily Balance
XXX		XXX		5-31		8,520.00

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 $30 for the printing of additional company checks.
2.		Cash sales of $760.72 on May 12 were deposited in the bank. The cash receipts entry and the deposit slip were incorrectly made for $800.72. The bank credited Timmins Company for the correct amount.
3.		Outstanding checks at May 31 totaled $464.15, and deposits in transit were $2,013.15.
4.		On May 18, the company issued check No. 1181 for $685 to H. Moses, on account. The check, which cleared the bank in May, was incorrectly journalized and posted by Timmins Company for $658.
5.		$4,000 was collected by the bank for Timmins Company on May 31 through electronic funds transfer.
6.		Included with the canceled checks was a check issued by Tomins Company to C. Pernod for $390 that was incorrectly charged to Timmins Company by the bank
7.		On May 31, the bank statement showed an NSF charge of $650 for a check issued by Sara Ballard, a customer, to Timmins Company on account Prepare the bank reconciliation at May 31, 2020. (List items that increase cash balance first.) Prepare the necessary adjusting entries for Timmins Company at May 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Answer 1

	Bank Reconciliation
	May 31, 2020
Cash balance per bank statement		8520
Add:
Deposit in transit	2013.15
Bank error—Tomins	390
		2403.15
		10923.15
Less: Outstanding checks		464.15
Adjusted cash balance per bank		10459
Cash balance per books		7206
Add: Electronic funds transfer received		4000
		11206
Less:
NSF check	650
Error in deposit	40
Error in recording check (1181)	27
Check printing charge	30
		747
Adjusted cash balance per books		10459
2
	Debit	Credit
Cash	4000
Accounts Receivable		4000
Accounts Receivable	650
Cash		650
Sales revenue	40
Cash		40
Accounts payable	27
Cash		27
Bank charges expense	30
Cash		30
Note: Alternative account title for bank charges expense is Micellaneous expense