Question
The cash account for Brentwood Bike Co. at May 1, 2016, indicated a balance of $33,857. During May, the total cash deposited was $139,616, and
The cash account for Brentwood Bike Co. at May 1, 2016, indicated a balance of $33,857. During May, the total cash deposited was $139,616, and checks written totaled $138,547. The bank statement indicated a balance of $43,270 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 $6,340. |
B. | A deposit of $1,858 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. $5,565 on a note left for collection. The face of the note was $5,300. |
D. | A check for $590 returned with the statement had been incorrectly charged by the bank as $950. |
E. | 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. |
F. | Bank service charges for May amounted to $36. |
G. | A check for $1,217 from Jennings Co. was returned by the bank due to insufficient funds. |
INSTRUCTIONS
1. Prepare a bank reconciliation as of May 31. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Deduct: or Add: will automatically appear if it is required.
2. Journalize the necessary entries. The accounts have not been closed. Refer to the Chart of Accounts for exact wording of account titles.
3. If a balance sheet were prepared for Brentwood Bike Co. on May 31, 2016, what amount should be reported as cash?
CHART OF ACCOUNTS
Brentwood Bike Co.General Ledger
ASSETS | |
110 | Cash |
111 | Petty Cash |
112 | Accounts Receivable-Jennings Co. |
131 | Notes 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 | |
211 | Accounts Payable-Adkins Co. |
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 |
590 | Miscellaneous Expense |
710 | Interest Expense |
Amount Descriptions | |
---|---|
Bank error in charging check as $590 instead of $950 | |
Bank error in charging check as $950 instead of $590 | |
Bank service charges | |
Check returned because of insufficient funds | |
Company error in recording note collected by bank | |
Deposit of May 31, not recorded by bank | |
Error in recording check | |
Outstanding checks | |
Proceeds of note collected by bank, including $265 interest |
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1. Prepare a bank reconciliation as of May 31. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Deduct: or Add: will automatically appear if it is required.
BRENTWOOD BIKE CO. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bank Reconciliation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
May 31, 2016
------------------------------------------------------------------------------------------------------------------------------ 2. Journalize the necessary entries. The accounts have not been closed. Refer to the Chart of Accounts for exact wording of account titles.
3. If a balance sheet were prepared for Brentwood Bike Co. on May 31, 2016, what amount should be reported as cash? |
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