P7-5a – zimmerman company -bank reconciliation statement & journal

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P7-5A – Zimmerman Company -Bank reconciliation statement & Journal entries

 

Zimmerman Company of Shawnee, Kansas, spreads herbicides and applies liquid fertilizer for local farmers. On May 31, 2014, the company’s Cash account per its general ledger showed a balance of $6,930.90.

The bank statement from Shawnee State Bank on that date showed the following balance.

SHAWNEE STATE BANK

Checks and Debits

 

Deposits and Credits

 

Daily Balance

XXX

 

XXX

 

5-31 7,160.00


A comparison of the details on the bank statement with the details in the Cash account revealed the following facts.

 

1.

 

The statement included a debit memo of $63.00 for the printing of additional company checks.

2.

 

Cash sales of $906.15 on May 12 were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for $956.15. The bank credited Zimmerman Company for the correct amount.

3.

 

Outstanding checks at May 31 totaled $294.25, and deposits in transit were $1,903.15.

4.

 

On May 18, the company issued check No. 1181 for $683 to M. Hartley, on account. The check, which cleared the bank in May, was incorrectly journalized and posted by Zimmerman Company for $638.

5.

 

A $2,792.00 note receivable was collected by the bank for Zimmerman Company on May 31 plus $133.00 interest. The bank charged a collection fee of $20.00. No interest has been accrued on the note.

6.

 

Included with the canceled checks was a check issued by Zinderberg Company to P. Conard for $337.00 that was incorrectly charged to Zimmerman Company by the bank.

7.

 

On May 31, the bank statement showed an NSF charge of $572.00 for a check issued by Bev Sullivan, a customer, to Zimmerman Company on account.