Prepare bank reconciliation and related entries. (LO 4) AP

You are given the following information for River Adventures Company:

RIVER ADVENTURES COMPANY Bank Reconciliation April 30, 2017
Cash balance per bank		$9,009
Add: Deposits in transit		846
		9,855
Less: Outstanding cheques
#526	$1,358
#533	279
#541	363
#555	79	2,079
Adjusted cash balance per bank		$7,776

The unadjusted cash balance at May 31 was $1,075. The May bank statement showed the following:

RIVER ADVENTURES COMPANY Bank Statement May 31, 2017
	Cheques and Other Debits
Date	Number	Amount	Deposits	Amount
Apr. 30				$9,009
May 1	526	$1,358	$ 846	8,497
2	541	363		8,134
6	556	223		7,911
6	557	1,800	1,250	7,361
9			980	8,341
12	559	1,650		6,691
13			426	7,117
13			1,650	8,767
14	561	799		7,968
16	562	2,045		5,923
20			222	6,145
21	563	2,487		3,658
22	564	603		3,055
23	565	1,033		2,022
27			980	3,002
28	NSF	440	1,771	4,333
31	SC	25		4,308

Additional information from the bank statement:

1.The deposit of $1,650 on May 13 is an electronic transfer from a customer in payment of its account. The amount includes $35 of interest, which River Adventures Company had not previously accrued.

2.The NSF for $440 is for a $425 cheque from a customer, Ralph King, in payment of his account, plus a $15 processing fee.

3.SC represents bank service charges for the month.

4.The bank made an error when processing cheque #564. The company also made two errors in the month. All cheques were written to pay accounts payable; all cash receipts were collections of accounts receivable.

The company's recorded cash payments and cash receipts for the month were as follows:

Cash Receipts
Date	Amount
May 5	$1,250
8	980
12	426
18	222
25	890
28	1,771
31	1,286
Total	$6,825

Cash Payments
Date	Cheque No.	Amount
May 2	556	$ 223
5	557	1,800
7	558	943
7	559	1,650
8	560	890
12	561	799
15	562	2,045
16	563	2,887
20	564	306
23	565	1,033
30	566	950
Total		$13,526

Instructions

(a)	Prepare a bank reconciliation.
(b)	Prepare the necessary adjusting journal entries at May 31.

P7-10B