On May 31, 2014, Terrell Company had a cash balance per books of $7,070.50. The bank statement from Home Town State Bank on that date showed a balance of $7,093.60. A comparison of the statement with the cash account revealed the following facts.

1.		The statement included a debit memo of $49.00 for the printing of additional company checks.
2.		Cash sales of $734.00 on May 12 were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for $784.00. The bank credited Terrell Company for the correct amount.
3.		Outstanding checks at May 31 totaled $565.25. Deposits in transit were $2,205.15.
4.		On May 18, the company issued check No. 1181 for $674 to Barry Dietz on account. The check, which cleared the bank in May, was incorrectly journalized and posted by Terrell Company for $647.
5.		A $3,289.00 note receivable was collected by the bank for Terrell Company on May 31 plus $89.00 interest. The bank charged a collection fee of $29.00. No interest has been accrued on the note.
6.		Included with the cancelled checks was a check issued by Bridges Company to Jon Newton for $889.00 that was incorrectly charged to Terrell Company by the bank.
7.		On May 31, the bank statement showed an NSF charge of $671.00 for a check issued by Sandy Grifton, a customer, to Terrell Company on account.

(a) Prepare the bank reconciliation at May 31, 2014.

(b) Prepare the necessary adjusting entries for Terrell Company at May 31, 2014.