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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:

  1. Checks outstanding totaled $10,110.
  2. A deposit of $8,230, 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. $4,350 on a note left for collection. The face of the note was $4,020.
  4. A check for $490 returned with the statement had been incorrectly charged by the bank as $940.
  5. 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.
  6. Bank service charges for May amounted to $60.
  7. 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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