Agricultural Genetics Company of Emporia, Kansas, spreads herbicides and ap- plies liquid fertilizer for local farmers. On May 31, 2001, the company’s cash account per its general ledger showed a balance of $6,781.50.

The bank statement from Emporia State Bank on that date showed the following balance:

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 $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 Agricultural Genetics Company for the correct amount.
3. Outstanding checks at May 31 totaled $276.25, and deposits in transit were $936.15.
4. On May 18, the company issued check No. 1181 for $685 to L. Kingston, on account.
The check, which cleared the bank in May, was incorrectly journalized and posted by Agricultural Genetics Company for $658.
5. A $2,000 note receivable was collected by the bank for Agricultural Genetics 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 Agricultural Genetics Company by the bank.
7. On May 31, the bank statement showed an NSF charge of $700 for a check issued by Pete Dell, a customer, to Agricultural: Genetics Company on account.
Instructions

(a) Prepare the bank reconciliation at May 31, 2001.

(b) Prepare the necessary adjusting entries for Agricultural Genetics Company at May 31, 2001.

Transcribed Image Text:

Checks and Debits XXX EMPORIA STATE BANK Deposits and Credits Daily Balance XXX 5-31 6,804.60