Bank Reconciliation and Entries

The cash account for Bravo Bike Co. at May 1, 2014, indicated a balance of $13,250. During May, the total cash deposited was $65,930 and checks written totaled $61,220. The bank statement indicated a balance of $22,350 on May 31. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:

Checks outstanding totaled $9,960.

A deposit of $8,110, representing receipts of May 31, had been made too late to appear on the bank statement.

The bank had collected for Bravo Bike Co. $4,290 on a note left for collection. The face of the note was $3,960.

A check for $490 returned with the statement had been incorrectly charged by the bank as $940.

A check for $630 returned with the statement had been recorded by Bravo Bike Co. as $360.

The check was for the payment of an obligation to Portage Co. on account. Bank service charges for May amounted to $40.

A check for $990 from Elkhart Co. was returned by the bank because of insufficient funds.

2) Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. For a compound transaction, if an amount box does not require an entry, leave it blank.

3. If a balance sheet were prepared for Bravo Bike Co. on May 31, 2014, what amount should be reported as cash?