The following information is available for Lotus Cake Inc, as of May 31,2012

-Cash on the books as of May 31 amounted to $43,784.16. Cash on the bank statement for the same date was $53,451.46.

-A deposit of $5,220.94, representing cash receipts of May 31, did not appear on the bank statement.

-Outstanding checks totaled $3,936.80

-A check for $1,920.00 returned with the statement was recorded incorrectly in the check register as $1,380.00. The check was for a cash purchase of equipment.

-The bank service charge for May amounted to $30.00.

-The bank collected $12,000.00 for Lotus Lake on a note. The face value of the note was $12,000.00.

-An NSF check for $178.56 from a customer, Justin Curtis, was returned with the statement.

-The bank mistakenly charged to company account a check for $750.00 drawn by another company.

-The bank reported that it had credited the account for $250.00 in interest on the average balance for May.

1. Prepare a bank reconciliation for Lotus Cake inc. as of May 31, 2012

2. Prepare the journal entries necessary to adjust the accounts

3What amount of cash should appear on Lotus Cakes balance sheet as of May 31.

4. Why is a bank reconciliation considered an important control over cash?