Balance of cash in bank account 1,300,000 Balance of bank statement 1,200,000 Outstanding checks, August 31: Number 555 10,000 761 55,000 762 40,000 763 25,000 764 65,000 765 70,000 Receipts of August...

Balance of cash in bank account 1,300,000
Balance of bank statement 1,200,000
Outstanding checks, August 31:
Number 555 10,000
761 55,000
762 40,000
763 25,000
764 65,000
765 70,000
Receipts of August 31, deposited September 1 275,000
The bank statement showed the following charges:
a. Service charge for August 5,000
b. NSF check received from a customer 85,000
The cashier-bookkeeper had misappropriated 30,000 and an additional 10,000 by

charging sales discounts and crediting accounts receivable.
The stub for check number 765 and the invoice relating thereto show that it was for

50,000. The check was recorded incorrectly in the cash disbursements journal as

70,000. The check was drawn in payment of an account payable.
Payment has been stopped on check number 555 which was drawn in payment of

an account payable. The payee cannot be located.
Required:
a. Prepare a bank reconciliation on August 31 using the adjusted balance

method.
b. Prepare adjusting entries in the Susan Company book on August 31