Bank Reconciliation and Entries

The cash account for Brentwood Bike Co. at May 1 indicated a balance of $14,350. During May, the total cash deposited was $73,130 and checks written totaled $67,900. The bank statement indicated a balance of $24,790 on May 31. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:

1. Checks outstanding totaled $11,040.
2. A deposit of $8,990, representing receipts of May 31, had been made too late to appear on the bank statement.
3. The bank had collected for Brentwood Bike Co. $4,750 on a note left for collection. The face of the note was $4,390.
4. A check for $580 returned with the statement had been incorrectly charged by the bank as $850.
5. A check for $970 returned with the statement had been recorded by Brentwood Bike Co. as $790. The check was for the payment of an obligation to Adkins Co. on account.
6. Bank service charges for May amounted to $40.
7. A check for $1,100 from Jennings Co. was returned by the bank because of insufficient funds

Instructions:

1. Prepare a bank reconciliation as of May 31.

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.

a. May 31

b. May 31

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

h 8-3 Exercises & Problems Bank Reconciliation and Entries The cash account for Brentwood Bike Co. at May 1 indicated a balance of $14,350. During May, the total cash deposited was $73,130 and checks written totaled $67,900. The bank statement indicated a balance of $24,790 on May 31. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items: a. Checks outstanding totaled $11,040. b. A deposit of $8,990, representing receipts of May 31, had been made too late to appear on the bank statement C. The bank had collected for Brentwood Bike Co. $4,750 on a note left for collection. The face of the note was $4,390. d. A check for $580 returned with the statement had been incorrectly charged by the bank as $850. e. A check for $970 returned with the statement had been recorded by Brentwood Bike Co. as $790. The check was for the payment of an obligation to Adkins Co. on account f. Bank service charges for May amounted to $40. 9. A check for $1,100 from Jennings Co. was returned by the bank because of insufficient funds. Instructions: Check My Work 2 more Check My Work uses remaining. Previous h 8-3 Exercises & Problems 1. Prepare a bank reconciliation as of May 31. Brentwood Bike Co. Bank Reconciliation May 31 Cash balance according to bank statement Add deposit of May 31, not recorded by bank Add bank error in charging check as $850 instead of $580 24,790 8,990 270 11,040 23,010 Deduct outstanding checks Adjusted balance Cash balance according to company's records Add note and interest collected by bank 14.350 4,750 19.100 70 Deduct check returned because of insufficient funds Deduct bank service charges Deduct error in recording check Adjusted balance Check My Work 2 more Check My Work uses remaining. Previous Ch 8-3 Exercises & Problems 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. a. May 31 Cash Notes Receivable Interest Revenue b. May 31 Accounts Payable-Adkins Co. Accounts Receivable-Jennings Co. Miscellaneous Expense Cash III III. IIII III 3. If a balance sheet is prepared for Brentwood Bike Co. on May 31, what amount should be reported as cash? Check My Work 2 more Check My Work uses remaining,