You are given the following information for River Adventures Company:

Additional information from the bank statement:
1. The deposit of $1,650 on May 13 is an electronic transfer from a customer in payment of its account. The amount includes $35 of interest, which River Adventures Company had not previously accrued.
2. The NSF for $440 is for a $425 cheque from a customer, Ralph King, in payment of his account, plus a $15 processing fee. The company’s policy is to pass on all NSF processing fees to the customer.
3. SC represents bank service charges for the month.
4. The bank made an error when processing cheque #564. The company made two errors in the month. All cheques were written to pay accounts payable; all cash receipts were collections of accounts receivable. The company’s recorded cash payments and cash receipts for the month were as follows:

Instructions
a. Prepare a bank reconciliation.
b. Prepare the necessary journal entries at May 31.

Taking It Further

How would you know if the bank has made an error in your account? Does this require an adjustment to your books?

Transcribed Image Text:

RIVER ADVENTURES COMPANY Cash balance per bank Add: Deposits in transit Bank Reconciliation April 30, 2024 Less: Outstanding cheques #526 #533 $1,358 279 363 79 $9,009 846 9,855 #541 #555 2,079 Adjusted cash balance per bank $7,776 The unadjusted cash balance at May 31 was $1,075. The May bank statement showed the following: