Problem 4

On May 31, Shark Company had a cash balance in its general ledger of $6,675. The companys bank statement from National bank showed a balance of $8,240 on May 31. The following items have come to your attention:

1. Sharks May 31 deposit of $1,005 was not included on the bank statement.

2. The banks maintenance service charge for the month was $100.

3. The bank collected a note receivable of $1,500 for Shark, along with an additional $58 for interest. The bank deducted a $30 fee for this service. Shark had not accrued any interest on the note.

4. Sharks bookkeeper erroneously recorded a payment to William Company for $192 as $129. The purchase was for printing expenses. The check cleared the bank for the correct amount of $192.

5. The bank erroneously recorded a deposit for Shark of $520 as $250.

6. Shark had the following checks outstanding at May 31: Ck #102 for $1,000; Ck #110 for $500; and Ck #115 for $275.

7. The bank returned a check from a customer as NSF in the amount of $300.

Step 1: Prepare a bank reconciliation for Shark Company as of May 31.

Step 2: Prepare any necessary journal entries as a result of the May 31 bank reconciliation.