Reference no: EM13569149

The Cash account of Safe and Secure Security Systems reported a balance of $2,490 at May 31, 2011. There were outstanding checks totaling $500 and a May 31 deposit in transit of $300. The bank statement, which came from Tri Cities Bank, listed the May 31 balance of $3,360. Included in the bank balance was a collection of $680 on account from Ryan Saar, a Safe and Secure customer who pays the bank directly. The bank statement also shows a $20 service charge and $10 of interest revenue that Safe and Secure earned on its bank balance.

R1. Prepare Safe and Securer's bank reconciliation at May 31.

 Balance as per bank statement = 3360

 Adjustments:

 Add: Deposit in transit = 300

 Less: Outstanding cheques = (500)

Adjusted balances as per bank statement = 3160

Bank balance as per cash book = 2490

Adjustments:

 Add: Collection from Ryan Saar = 680

 Less: Service charge = (20)

 Add: Interest received = 10

 Adjusted balance as per cash book = 3160

Adjusted balance as per cash book = Adjusted balance as per bank statement = 3160

7. Review your results from preparing Safe and Secure Security Systems' bank reconciliation problem #6.

Requirement

R1. Journalize the company's transactions that arise from the bank reconciliation. Include an explanation with each entry.