Part 1

As the controller of Lynbrook, Inc. you are responsible for preparing the monthly bank reconciliation. Using the information below, prepare the bank reconciliation for January 31, 2020.

1. The ledger account for Cash showed a balance at January 31 of $127,500.

2. The January bank statement showed a closing balance of $108,750.

3. The cash received on January 31 amounted to $28,000. It was left at the bank in the night depository chute after banking hours on January 31 and therefore was not recorded by the bank on the January statement.

4. Also included with the January bank statement was a debit memorandum from the bank for $75 representing service charges for January.

5. A credit memorandum enclosed with the January bank statement indicated that a non-interest- bearing note receivable for $5,000 from Jeff Burkett, left with the bank for collection, had been collected and the proceeds credited to the account of Lynbrook, Inc.

6. Comparison of the paid checks returned by the bank with the entries in the accounting records revealed that check no. 1601 for $519, issued January 15 in payment for office equipment, had been erroneously entered in Lynbrook's records as $915.

7. Examination of the paid checks also revealed that three checks, all issued in January, had not yet been paid by the bank: no. 1611 for $2,000; no. 1625 for $1,250; no. 1630 for $779.

8. Included with the January bank statement was a $100 check drawn by Pat Thomas, a customer of Lynbrook, Inc. This check was marked NSF. It had been included in the deposit of January 27 but had been charged back against the company's account on January 31.

Required: a. Prepare a bank reconciliation for Lynbrook, Inc., at January 31, 2020.

b. Prepare journal entries (in general journal form) to adjust the accounts at January 31, 2020.

c. State the amount of cash that should be included in the balance sheet at January 31, 2020.

Part 2

As the controller of Lynbrook, Inc., you decided to create a petty cash fund of $500 on February 1, 2020. Towards the end of February, the following cash receipts/vouchers were in the petty cash box:

repairs expense $ 92

postage expense 130

office supplies 47

telephone expense 81

delivery expense 60

In addition to the above cash receipts/vouchers the petty cash box contained $87 in cash. Due to the high use of the petty cash fund during February, it was determined that the petty cash fund should be increased to $850 at the end of February. On February 29, Lynbrook made the decision to replenish the petty cash fund and increase the balance to $850.

Required: Prepare journal entries, in general journal form, to record the following:

a) Establishment of the petty cash fund on February 1

b) Replenishment of the petty cash fund and increase the balance to $850 on February 29.