Question 2

Question 2 [30 points] The following information is for Ludwig Inc.: a. Balance per the bank statement dated May 31, 2014 is $28,650. b. Balance of the Cash account on the company books as of May 31, 2014 is $16,945. c. Cheques written that had not cleared the bank by May 31, 2014 were: #575 : $1,100 #565 : $850 #564 : $1,400 #583: $1,050 #572: $1,000 d. Bank service charges for the month amount to $25. e. Included with the bank statement was a $20 credit memorandum for interest earned on the bank account during the month. f. Included with the bank statement was an NSF cheque for $550 that had been received from a customer in payment of his account. g. Cheque #555, for office supplies in the amount of $856, was recorded in the Cash Disbursements Journal incorrectly as $8,566. h. Bank deposit on May 31, 2014 for $850 does not appear on the bank statement. Prepare a bank reconciliation statement as of May 31, 2014, as well as the necessary adjusting journal entries. Enter the transaction letter as the description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (i.e., January 15 would be 15/Jan). Bank statement balance Add: Ludwig Inc. Bank Reconciliation May 31, 2014 Book balance Add: + = Deduct: Deduct: Outstanding cheques: + Adjusted bank balance Adjusted book balance General Journal Account/Explanation Page GJ2 F Debit Credit Date +