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The cash account for Brentwood Bike Co. at May 1, 2016, indicated a balance of $34,250. During May, the total cash deposited was $140,300, and

The cash account for Brentwood Bike Co. at May 1, 2016, 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:
A. Checks outstanding totaled $6,440.
B. A deposit of $1,850 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. $5,250 on a note left for collection. The face of the note was $5,000.
D. A check for $390 returned with the statement had been incorrectly charged by the bank as $930.
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 $30.
G. A check for $1,325 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

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

Amount Descriptions
Bank error in charging check as $390 instead of $930
Bank error in charging check as $930 instead of $390
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 $250 interest

Bank Reconciliation

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

1

Cash balance according to bank statement

2

3

4

5

6

Adjusted balance

7

8

Cash balance according to companys records

9

10

11

12

13

14

Adjusted balance

Journal

2. Journalize the necessary entries. The accounts have not been closed. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

DATE DESCRIPTION POST. REF. DEBIT CREDIT

1

2

3

4

5

6

7

Final Question

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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