4B. Bank Reconciliation On May 31, the Cash in Bank account of James Company, a sole proprietorship, had a balance of $5,950.30. On that date, the bank statement indicated a balance of $7,868.50. A comparison of returned checks and bank advices revealed the following: 1. Deposits in transit May 31 totaled $2,603.05. 2. Outstanding checks May 31 totaled $3,152.45. 3. The bank added to the account $19.80 of interest income earned by James during May. 4. The bank collected a $2,400 note receivable for James and charged a $30 collection fee. Both items appear on the bank statement. 5. Bank service charges in addition to the collection fee, not yet recorded, were $65. 6. Included with the returned checks is a memo indicating that L. Ryder's check for $686 had been returned NSF. Ryder, a customer, had sent the check to pay an account of $700 less a 2% discount. 7. James Company incorrectly recorded the payment of an account payable as $360; the check was for $630. Required a. Prepare a bank reconciliation for James Company at May 31 . b. Prepare the joumal entry (or entries) necessary to bring the Cash in Bank account into agreement with the reconciled cash balance on the bank reconciliation