On May 31, 1998, Maloney Company had a cash balance per books of \(\$ 5,781.50\). The bank statement from Community Bank on that date showed a balance of \(\$ 6,804.60\). A comparison of the statement with the cash account revealed the following facts:

1. The statement included a debit memo of \(\$ 40\) for the printing of additional company checks.

2. Cash sales of \(\$ 836.15\) on May 12 were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for \(\$ 846.15\). The bank credited Maloney Company for the correct amount.

3. Outstanding checks at May 31 totaled \(\$ 1,276.25\), and deposits in transit were \(\$ 936.15\).

4. On May 18 the company issued check No. 1181 for \(\$ 685\) to M. Helms, on account. The check, which cleared the bank in May, was incorrectly journalized and posted by Maloney Company for \(\$ 658\).

5. A \(\$ 2,000\) note receivable was collected by the bank for Maloney Company on May 31 plus \(\$ 80\) interest. The bank charged a collection fee of \(\$ 20\). No interest has been accrued on the note.

6. Included with the cancelled checks was a check issued by Teller Company to P. Jonet for \(\$ 600\) that was incorrectly charged to Maloney Company by the bank 7. On May 31 the bank statement showed an NSF charge of \(\$ 700\) for a check issued by W. Hoad, a customer, to Maloney Company on account.

\section*{Instructions}

(a) Prepare the bank reconciliation as of May 31, 1998.

(b) Prepare the necessary adjusting entries at May 31, 1998.