The cash account of Villa Corp. shows a ledger balance of $3,969.85 on June 30, 2014. The bank statement as at that date indicates a balance of $4,150. When the statement was compared with the cash records, the following facts were determined:
1. There were bank service charges for June of $25.00.
2. A bank memo stated that Baa Dai's note for $900 and interest of $36 had been collected on June 29, and the bank had made a charge of $5.50 on the collection. (No entry had been made on Villa’s books when Baa Dai's note was sent to the bank for collection.)
3. Receipts for June 30 of $2,890 were not deposited until July 2.
4. Cheques outstanding on June 30 totalled $2,136.05.
5. On June 29, the bank had charged Villa Corp.'s account for a customer's uncollectible cheque amounting to $453.20.
6. A customer's cheque for S90 had been entered as $60 in the cash receipts journal by Villa Corp. on June 15.
7. Cheque no. 742 in the amount ofS491 had been entered in the cashbook as $419, and cheque no. 747 in the amount of $58.20 had been entered as $582. Both cheques were issued to pay for purchases of equipment.
8. In May 2014, the bank had charged a $27.50 Wella Corp. cheque against the Villa Corp. account. The June bank statement indicated that the bank had reversed this charge and corrected its error.
Instructions
(a) Prepare a bank reconciliation dated June 30, 2014, proceeding to a correct cash balance.
(b) Prepare any entries that are needed to make the books correct and complete.