Task: Bank Reconciliation and adjusting entries
The cash account of Jose Orozco Co. showed ledger balance of $3,969,.85 on June 30, 2007. The bank statement as of that date showed a balance of $4,150. Upon coming the statement with the cash records, the following facts were determined.
1. There were bank service charges for June of $25.
2. A bank memo stated that Bao Dai's note for $900 and interest of $36 had been collected on June 29, and the bank had made a charge of $5.50 on the collection (no entry had been made on Orozco's books when Bao Dai's note was sent to the bank)
3. Receipts for June 30 for $2,890 were not deposited until July 2.
4. Checks outstanding on June 30 totaled $2,136.05
5. The bank had charged the Orozco Co.'s account for a cusomer's uncollectible check amounting to $453.2 on June 29.
6. A customer's check for $90 had been entered as $60 in the cash receipts journal by Orozco on June 15.
7. Check #742 in the amount of $491 had been entered in the cash journal as $429, and check #747 in the amount of $58.20 had been entered as $582. Both checks had been issued to pay for purchases of equipment.
Instructions:
a. Prepare a bank reconciliation dated June 30, 2007, proceeding to a correct cash balance.
b. Prepare any entries necessary to make the books correct and complete.