Bank Reconciliation and Entries The cash account for Brentwood Bike Co. at May 1 indicated a balance of $14,410. During May, the total cash deposited was $72,900 and checks written totaled $67,690. The bank statement indicated a balance of $24,710 on May 31. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items: Checks outstanding totaled $11,010. A deposit of $8,970, representing receipts of May 31, had been made too late to appear on the bank statement. The bank had collected for Brentwood Bike Co. $4,740 on a note left for collection. The face of the note was $4,370. A check for $360 returned with the statement had been incorrectly charged by the bank as $630. A check for $410 returned with the statement had been recorded by Brentwood Bike Co. as $140. The check was for the payment of an obligation to Adkins Co. on account. Bank service charges for May amounted to $60. A check for $1,090 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 $ 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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Bank Reconciliation and Entries

The cash account for Brentwood Bike Co. at May 1 indicated a balance of $14,410. During May, the total cash deposited was $72,900 and checks written totaled $67,690. The bank statement indicated a balance of $24,710 on May 31. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:

Checks outstanding totaled $11,010.
A deposit of $8,970, representing receipts of May 31, had been made too late to appear on the bank statement.
The bank had collected for Brentwood Bike Co. $4,740 on a note left for collection. The face of the note was $4,370.
A check for $360 returned with the statement had been incorrectly charged by the bank as $630.
A check for $410 returned with the statement had been recorded by Brentwood Bike Co. as $140. The check was for the payment of an obligation to Adkins Co. on account.
Bank service charges for May amounted to $60.
A check for $1,090 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		$

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

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