Bank Reconciliation and Entries The cash account for Brentwood Bike Co. at May 1 indicated a balance of $12,980. During May, the total cash deposited was $64,430 and checks written totaled $59,820. The bank statement indicated a balance of $21,840 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 $9,730. b. A deposit of $7,920, 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. $4,190 on a note left for collection. The face of the note was $3,870. d. A check for $270 returned with the statement had been incorrectly charged by the bank as $720. e. 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. f. Bank service charges for May amounted to $60. g. A check for $970 from Jennings Co. was returned by the bank because of insufficient funds. Instructions: 1. Prepare a bank reconciliation as of May 31.
Bank Reconciliation and Entries The cash account for Brentwood Bike Co. at May 1 indicated a balance of $12,980. During May, the total cash deposited was $64,430 and checks written totaled $59,820. The bank statement indicated a balance of $21,840 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 $9,730. b. A deposit of $7,920, 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. $4,190 on a note left for collection. The face of the note was $3,870. d. A check for $270 returned with the statement had been incorrectly charged by the bank as $720. e. 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. f. Bank service charges for May amounted to $60. g. A check for $970 from Jennings Co. was returned by the bank because of insufficient funds. Instructions: 1. Prepare a bank reconciliation as of May 31.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text: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
b. May 31
3. If a balance sheet is prepared for Brentwood Bike Co. on May 31, what amount should be reported as cash?
$
Transcribed Image Text:Bank Reconciliation and Entries
The cash account for Brentwood Bike Co. at May 1 indicated a balance of $12,980. During May, the total cash
deposited was $64,430 and checks written totaled $59,820. The bank statement indicated a balance of $21,840
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 $9,730.
b. A deposit of $7,920, 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. $4,190 on a note left for collection. The face of the note was
$3,870.
d. A check for $270 returned with the statement had been incorrectly charged by the bank as $720.
e. 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.
f. Bank service charges for May amounted to $60.
g. A check for $970 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
$
Adjusted balance
Cash balance according to company's records
Adjusted balance
+A
LA
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