Question
Part 1. Journalize the entries to record the following (refer to the Chart of Accounts for exact wording of account titles): Instructions A. On March
Part 1.
Journalize the entries to record the following (refer to the Chart of Accounts for exact wording of account titles):
Instructions | |
A. | On March 1, Check is issued to establish a petty cash fund of $1,175. |
B. | On April 1, the amount of cash in the petty cash fund is now $110. Check is issued to replenish the fund, based on the following summary of petty cash receipts: office supplies, $665; miscellaneous selling expense, $211; miscellaneous administrative expense, $178. (Because the amount of the check to replenish the fund plus the balance in the fund do not equal $1,175, record the discrepancy in the cash short and over account.) |
CHART OF ACCOUNTS General Ledger
ASSETS | |
110 | Cash |
111 | Petty Cash |
120 | Accounts Receivable |
131 | Notes Receivable |
132 | Interest Receivable |
141 | Merchandise Inventory |
145 | Office Supplies |
146 | Store Supplies |
151 | Prepaid Insurance |
181 | Land |
191 | Office Equipment |
192 | Accumulated Depreciation-Office Equipment |
193 | Store Equipment |
194 | Accumulated Depreciation-Store Equipment |
LIABILITIES | |
210 | Accounts Payable |
221 | Notes Payable |
222 | Interest Payable |
231 | Salaries Payable |
241 | Sales Tax Payable |
EQUITY | |
310 | Owner, Capital |
311 | Owner, Drawing |
312 | Income Summary |
REVENUE | |
410 | Sales |
610 | Interest Revenue |
EXPENSES | |
510 | Cost of Merchandise Sold |
515 | Credit Card Expense |
516 | Cash Short and Over |
520 | Salaries Expense |
531 | Advertising Expense |
532 | Delivery Expense |
533 | Insurance Expense |
534 | Office Supplies Expense |
535 | Rent Expense |
536 | Repairs Expense |
537 | Selling Expenses |
538 | Store Supplies Expense |
561 | Depreciation Expense-Office Equipment |
562 | Depreciation Expense-Store Equipment |
591 | Miscellaneous Administrative Expense |
592 | Miscellaneous Selling Expense |
710 | Interest Expense |
Part 2.
Bank Reconciliation and Entries
The cash account for Brentwood Bike Co. at May 1 indicated a balance of $13,450. During May, the total cash deposited was $66,940 and checks written totaled $62,150. The bank statement indicated a balance of $22,690 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 $10,110.
- A deposit of $8,230, representing receipts of May 31, had been made too late to appear on the bank statement.
- The bank had collected for Brentwood Bike Co. $4,350 on a note left for collection. The face of the note was $4,020.
- 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 Brentwood Bike Co. as $360. The check was for the payment of an obligation to Adkins Co. on account.
- Bank service charges for May amounted to $60.
- A check for $1,000 from Jennings Co. was returned by the bank because of insufficient funds.
Instructions:
1. Prepare a bank reconciliation as of May 31.
Brentwood Bike Co. | ||
Bank Reconciliation | ||
May 31 | ||
Cash balance according to bank statement | $ | |
$ | ||
$ | ||
Adjusted balance | $ | |
Cash balance according to company's records | $ | |
$ | ||
$ | ||
Adjusted balance | $ |
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? $
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