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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:

Instructions

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.

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 $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

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. Whenever there is more than one adjusting item in the bank portion of the reconciliation or the general ledger portion of the bank reconciliation, enter in the order presented in the instructions.

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

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

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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