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Gunther Company's May 31, 2020, bank statement balance is $11,125 and shows a service charge of $26, interest earned of $12, and an NSF cheque
Gunther Company's May 31, 2020, bank statement balance is $11,125 and shows a service charge of $26, interest earned of $12, and an NSF cheque for $720. Deposits in transit total $2,000, and outstanding cheques are $1,650. The bookkeeper incorrectly recorded as $176 a cheque of $167 in payment of an account payable. The company's book balance at May 31, 2020, was $12,200. a. Prepare the bank reconciliation for Gunther Company at May 31, 2020. Calculate the adjusted bank balance first, and then calculate the adjusted book balance below it. Show that both adjusted balances agree. b. Prepare the journal entries needed to update the company's books
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