A Green Acres Company of Canton, Iowa, spreads herbicides and applies liquid fertilizer for local farmers. On May 31, 2007, the company’s cash account per its general ledger showed a balance of $6,738.90.

The bank statement from Canton State Bank on that date showed the following balance.

CANTON STATE BANK Checks and Debits Deposits and Credits Daily Balance XXX XXX 5-31 7,112.00 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 $40 for the printing of additional company checks. 2. Cash sales of $833.15 on May 12 were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for $839.15. The bank credited Green Acres Company for the correct amount. 3. Outstanding checks at May 31 totaled $276.25, and deposits in transit were $1,180.15. 4. On May 18, the company issued check No. 1181 for $685 to R. Delzer, on account.

The check, which cleared the bank in May, was incorrectly journalized and posted by Green Acres Company for $658.

Ss A $2,200 note receivable was collected by the bank for Green Acres Company on May 31 plus $110 interest. The bank charged a collection fee of $20. No interest has been accrued on the note.

. Included with the cancelled checks was a check issued by Green Day Company to P. Jonet for $360 that was incorrectly charged to Green Acres Company by the bank.

. On May 31, the bank statement showed an NSF charge of $580 for a check issued by Natalie Fong, a customer, to Green Acres Company on account.

Instructions

(a) Prepare the bank reconciliation at May 31, 2007.

(b) Prepare the necessary adjusting entries for Green Acres Company at May 31, 2007.