On May 31, 2011, James Logan Company had a cash balance per books of $6,602.94. The bank statement from Farmers State Bank on that date showed a balance of $6,375.10. A comparison of the statement with the cash account revealed the following facts.
The statement included a debit memo of $37.20 for the printing of additional company checks.
Cash sales of $833.21 on May 12 were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for $883.21.
The bank credited Logan Company for the correct amount.
Outstanding checks at May 31 totaled $673.34. Deposits in transit were $1,920.46.
On May 18, the company issued check No. 1181 for $685.00 to Barry Trest, on account. The check, which cleared the bank in May, was incorrectly journalized and posted by Logan Company for $658.00.
A $2,460.00 note receivable was collected by the bank for Logan Company on May 31 plus $79.61 interest. The bank charged a collection fee of $15.23. No interest has been accrued on the note.
Included with the cancelled checks was a check issued by Bridgetown Company to Tom Lujak for $777.41 that was incorrectly charged to Logan Company by the bank.
On May 31, the bank statement showed an NSF charge of $613.49 for a check issued by Sandy Grifton, a customer, to Logan Company on account.
a: Prepare the bank reconciliation at May 31, 2011. (List amounts from largest to smallest eg 10, 5, 3, 2. Round answers to 2 decimal places, e.g. 10.50.)
b: Prepare the necessary adjusting entries for Logan Company at May 31, 2011. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)