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# Preparing a Bank reconciliation

On May 31, 2007, Galenti Company had a cash balance per books of \$5,681.50. The bank statement from Community Bank on that date showed a balance of \$7,964.60. A comparison of the statement with the cash account revealed the following facts.

1. The statement included a debit memo of \$70 for the printing of additional company checks.
2. Cash sales of \$786.15 on May 12 were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for \$796.15. The bank credited Galenti Company for the correct amount.

3. Outstanding checks at May 31 totalled \$806.25, and deposits in transit were \$836.15.

4. On May 18 the company issued check No. 1181 for \$685 to N. Habben, on account. The check, which cleared the bank in May, was incorrectly journalized and posted by Galenti Company for \$658.

5. A \$3,000 note receivable was collected by the bank for Galenti Company on May 31 plus \$80 interest. The bank charged a collection fee of \$30. No interest has been accrued on the note.

6. Included with the cancelled checks was a check issued by Gallen Company to C. Young for \$290 that was incorrectly charged to Galenti Company by the bank.

7. On May 31 the bank statement showed an NSF charge of \$340 for a check issued by K. Uzong, a customer, to Galenti Company on account.

(a) Prepare the bank reconciliation as of May 31, 2007.
(b) Prepare the necessary adjusting entries at May 31, 2007.

#### Solution Preview

The attached Excel Worksheet provides detailed solution to the problem given above.

The problem ...

#### Solution Summary

The problem given is to reconcile the cash balance with the amount stated on the Bank statement. The solution contains explanations and guideline on how to do a bank reconciliation. The solution will be useful to both students and other professionals interested in doing bank reconciliation.

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