Question
On May 31, Wildhorse, Inc. showed a cash balance per books of $6,842. The bank statement from Emporia State Bank showed a balance of $7,968
On May 31, Wildhorse, Inc. showed a cash balance per books of $6,842. The bank statement from Emporia State Bank showed a balance of $7,968 on that same date. A comparison of the statement with the Cash account revealed the following facts: 1. The statement included a charge of $60 for the printing of additional company checks. 2. On May 18, the company issued a check for $720 to satisfy an account payable. The journal entry was incorrectly made for $770. 3. Outstanding checks on May 31 totaled $276, and deposits in transit were $1900. 4. On May 31, the bank statement showed an NSF charge of $480 for a check issued by one of Wildhorses customers and previously deposited by Wildhorse. 5. A deposit in the amount of $500 made by another company was incorrectly put in Wildhorses account by the bank. 6. Cash sales of $903 on May 12 were deposited in the bank, and the bank correctly recorded the deposit. The journal entry was incorrectly made for $973. 7. On May 31, a $2,810 was received and recorded by the bank from a customer through electronic funds transfer. $2,700 was for a note receivable and $110 was for interest. The collection has not been recorded by Wildhorse.
A. Prepare a bank reconciliation. Prepare the journal entries necessary to correct Wildhorses books.
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