BANK RECONCILIATION Firebird Corp. prepares monthly bank reconciliations of its checking account balance.

The bank statement for May 2009 indicated the following:

Balance, May 31, 2009 $29,700 Service charge for May 80 Interest earned during May 120 NSF check from Valerie Corp. (deposited by Firebird) 230 Note ($4,000) and interest ($100) collected for Firebird from a customer of Firebird’s 4,100 An analysis of canceled checks and deposits and the records of Firebird Corp. revealed the following items:

Checking account balance per Firebird’s books $26,040 Outstanding checks as of May 31 2,950 Deposit in transit at May 31 3,110 Error in recording check #4456 issued by Firebird 90 The correct amount of check #4456 is $760. It was recorded as a cash disbursement of

$670 by mistake. The check was issued to pay for merchandise purchases. The check appeared on the bank statement correctly.

Required:

Prepare a bank reconciliation schedule at May 31, 2009, in proper form.

Cornerstone Exercise