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The bank statement for Farmer Co. indicates a balance of $7,735 on June 30. After the journals for June were posted, the cash account had
The bank statement for Farmer Co. indicates a balance of $7,735 on June 30. After the journals for June were posted, the cash account had a balance of $4,098. Prepare a bank reconciliation on the basis of the following reconciling items:
- Cash sales of $742 were erroneously recorded in the cash receipts journal as $724.
- Deposits in transit not recorded by bank, $425.
- Bank debit memo for service charges, $35.
- Bank credit memo for note collected by bank, $2,475 including $75 interest.
- Bank debit memo for $256 NSF (not sufficient funds) check from Janice Smith, a customer.
- Checks outstanding, $1,860.
The cash account for Norwegian Medical Co. at April 30 indicated a balance of $93,115. The bank statement indicated a balance of $125,800 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:
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