The bank portion of last month’s bank reconciliation showed the following for River Adventures Ltd.:
The adjusted cash balance per bank agreed with the cash balance per books at April 30. The May bank statement showed the following:
River Adventures’ cash receipts and payments for the month of May showed the following:
Additional information:
1. The bank made an error when processing cheque #558.
2. The EFT collections were not previously recorded.
3. The company made an error in recording the May 25 deposit that related to a cash sale.
4. Because the EFT for prepaid insurance payment occurred near the end of the month, it has not been recorded yet.
Instructions
(a) Calculate the unadjusted cash balance per books at May 31, prior to reconciliation.
(b) What is the amount of the deposits in transit at May 31?
(c) What is the amount of the outstanding cheques at May 31?
(d) Prepare the bank reconciliation on May 31.
(e) Prepare any adjusting journal entries required from there conciliation.
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