The Following information is available for Sedona, Inc., as of May 31, 2014 (Total of 30 pts):

1. Cash on the books as of May 31 amounted to $42, 754.16. Cash on the bank statement for the same date is $52,351.46.
2. A deposit of $5,220.94, representing cash receipts of May 31, did not appear on the bank statement.
3. Outstanding checks totaled $3,936.80.
4. 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 merchandise.
5. The bank service charge for May amounted to $25.
6. The bank collected $12,360.00 for Sedona, on a note. The face value of the note was $12,000.00.
7. An NSF check for $183.56 from a customer, Eva Mendez, was returned with the statement.
8. The Bank mistakenly charged to the company account a check for $850.00 drawn by another company.
9. The bank reported that it had credited the account for $120.00 in interest on the average balance for May.

Required

1. Prepare a bank reconciliation for Sedona as of May 31, 2014 .
2. Prepare the journal entries necessary to adjust the accounts.
3. What amount of cash should appear on Sedonas balance sheet as of May 31 ?

Accounting ConnectionWhy is a bank reconciliation considered an important control over cash?