On June 30, 2021, EZ Fertilizer?s cash account per its general ledger showed the following balance:

The bank statement from Canada 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 printing of additional company cheques.

2. Cash sales of $624 on June 21 were deposited in the bank. The bookkeeper recorded the deposit in the cash journal as $642.

3. Outstanding cheques on June 30 totalled $946 and deposits in transit were $1,587.

4. On June 18, the company issued cheque #1924 for $356 to D. Katz on account. The cheque, which cleared the bank in June, was incorrectly journalized and posted by EZ Fertilizer for $536.

5. A $1,550 note receivable was wired to the bank account of EZ Fertilizer on June 30 plus $45 interest. The bank charged a $25 collection fee. No interest has been accrued on the note.

6. Included with the cancelled cheques was a cheque issued by EZ Company for $234 that was incorrectly charged to EZ Fertilizer by the bank.

7. On June 30, the bank statement showed an NSF charge of $966 for a cheque issued by Amanda Vallee, a customer, to EZ Fertilizer on account.

Instructions

a. Prepare the bank reconciliation at June 30.

b. Prepare the necessary adjusting entries at June 30.

The owner of EZ Fertilizer has advised the bookkeeper to prepare the company?s bank reconciliation only at year end. Explain to the owner the benefits of preparing a monthly bank reconciliation.

Transcribed Image Text:

CASH No. 101 Date Explanation Ref Debit Credit Balance June 30 Balance 6,925