Rancho Foods deposits all cash receipts each Wednesday and Friday in a night depository, after…

Rancho Foods deposits all cash receipts each Wednesday and Friday in a night depository, after banking hours. The data required to reconcile the bank statement as of May 31 have been taken from various documents and records and are reproduced as follows. The sources of the data are printed in capital letters. All checks were written for payments on account. CASH ACCOUNT: Balance as of May 1 ……………….. $9,578.00 CASH RECEIPTS FOR MONTH OF MAY ……… $5,255.89 DUPLICATE DEPOSIT TICKETS: Date and amount of each deposit in May: CHECKS WRITTEN: Number and amount of each check issued in May: MEMBER FDIC PAGE 1 AMERICAN NATIONAL BANK OF DETROIT Instructions 1. Prepare a bank reconciliation as of May 31. If errors in recording deposits or checks are discovered, assume that the errors were made by the company. Assume that all deposits are from cash sales except for the note receivable of $4,000 and interest of $160 collected on May 14. All checks are written to satisfy accounts payable. 2. Illustrate the effects on the accounts and financial statements of the bank reconciliation. 3. What is the amount of Cash that should appear on the balance sheet as of May 31? 4. Assume that a canceled check for $50 has been incorrectly recorded by the bank as $500. Briefly explain how the error would be included in a bank reconciliation and how it should becorrected.