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The cash account for Brentwood Bike Co. at May 1 indicated a balance of $14,640. During May, the total cash deposited was $73,260 and checks


The cash account for Brentwood Bike Co. at May 1 indicated a balance of $14,640. During May, the total cash deposited was $73,260 and checks written totaled $68,020. The bank statement indicated a balance of $24,840 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 $11,060.
  2. A deposit of $9,010, 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. $4,760 on a note left for collection. The face of the note was $4,400.
  4. A check for $490 returned with the statement had been incorrectly charged by the bank as $940.
  5. A check for $520 returned with the statement had been recorded by Brentwood Bike Co. as $250. 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 $1,100 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
$
Add deposit of May 31, not recorded by bank $
Add bank error in charging check as $940 instead of $490



$
Deduct outstanding checks

Adjusted balance
$
Cash balance according to company's records
$
Add note and interest collected by bank



$
Deduct check returned because of insufficient funds $
Deduct bank service charges

Deduct error in recording check

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 Cash


Notes Receivable


Interest Revenue

b. May 31 Accounts Payable-Adkins Co.


Accounts Receivable-Jennings Co.


Miscellaneous Expense


Cash

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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