The cash account for Brentwood Bike Co. at May 1 indicated a balance of $34,250. During May, the total cash deposited was $140,300, and checks written totaled $138,880. The bank statement indicated a balance of $43,525 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 $6,440.

2. A deposit of $1,850 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. $5,250 on a note left for collection. The face of the note was $5,000.

4. A check for $390 returned with the statement had been incorrectly charged by the bank as $930.

5. A check for $210 returned with the statement had been recorded by Brentwood Bike Co. as $120. The check was for the payment of an obligation to Adkins Co. on account.

6. Bank service charges for May amounted to $30.

7. A check for $1,325 from Jennings Co. was returned by the bank due to insufficient funds.

A. Prepare a bank reconciliation as of May 31.

Check Figure: Adjusted balance: $39,475

B. Journalize the necessary entries. The accounts have not been closed.

C.

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

Brentwood Bike Co. Bank Reconciliation May 31st Balance per Bank Statement Add: Deposit in Transit Error in Recording Check Deduct: Outstanding Checks Adjusted balance Balance per Company Records Add: Collection of Note (5,000) with Interest (250) Deduct: Error in Recording Check Bank Service Charge Non-Sufficent Funds (NSF) Adjusted balance ** Cash balance, May 1 Plus cash deposited in May Less checks written in May Balance per company's records, May 31st Journal Entries Amount to be reported as Cash on May 31st Balance Sheet