At the end of May, the accounting records for Mitchell, Inc. revealed a cash balance equal to \$14,700. However, the bank's cash balance at the end of May is only \$710. Mitchell is concerned and asks the company's accountant to prepare a bank reconciliation for the month of May.
Examination of the bank statement and company records at the end of May reveals the following:
NSF checks \$5,380
Deposits outstanding 7,600
Service fees 150
Checks outstanding 490
In addition, during May, the company's accountant wrote a check to one of its suppliers for \$150. The check was recorded correctly in the company's records for \$150, but processed incorrectly by the bank for \$1,500. Mitchell has contacted the bank, which has agreed to fix the error.
Required:
(1) Prepare a bank reconciliation for the month of May to determine the correct ending cash balance.
(2) Record any necessary entry(ies) to adjust the balance for cash.