P7-5A – Zimmerman Company -Bank reconciliation statement & Journal entries
Zimmerman Company of Shawnee, Kansas, spreads herbicides and applies liquid fertilizer for local farmers. On May 31, 2014, the company’s Cash account per its general ledger showed a balance of $6,930.90.
The bank statement from Shawnee State Bank on that date showed the following balance.
SHAWNEE STATE BANK | ||||
Checks and Debits | Deposits and Credits | Daily Balance | ||
XXX | XXX | 5-31 7,160.00 |
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 $63.00 for the printing of additional company checks. | |
2. | Cash sales of $906.15 on May 12 were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for $956.15. The bank credited Zimmerman Company for the correct amount. | |
3. | Outstanding checks at May 31 totaled $294.25, and deposits in transit were $1,903.15. | |
4. | On May 18, the company issued check No. 1181 for $683 to M. Hartley, on account. The check, which cleared the bank in May, was incorrectly journalized and posted by Zimmerman Company for $638. | |
5. | A $2,792.00 note receivable was collected by the bank for Zimmerman Company on May 31 plus $133.00 interest. The bank charged a collection fee of $20.00. No interest has been accrued on the note. | |
6. | Included with the canceled checks was a check issued by Zinderberg Company to P. Conard for $337.00 that was incorrectly charged to Zimmerman Company by the bank. | |
7. | On May 31, the bank statement showed an NSF charge of $572.00 for a check issued by Bev Sullivan, a customer, to Zimmerman Company on account. |