he cash account for Brentwood Bike Co. at May 1 indicated a balance of $14,850. During May, the total cash deposited was $75,160 and checks written totaled $69,790. The bank statement indicated a balance of $25,480 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 $11,350. A deposit of $9,240, representing receipts of May 31, had been made too late to appear on the bank statement. The bank had collected for Brentwood Bike Co. $4,890 on a note left for collection. The face of the note was $4,510. A check for $580 returned with the statement had been incorrectly charged by the bank as $850. 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 $70. A check for $1,130 from Jennings Co. was returned by the bank because of insufficient funds. Instructions: Question Content Area 1. 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. 2. If a balance sheet is prepared for Brentwood Bike Co. on May 31, what amount should be reported as cash?

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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he cash account for Brentwood Bike Co. at May 1 indicated a balance of $14,850. During May, the total cash deposited was $75,160 and checks written totaled $69,790. The bank statement indicated a balance of $25,480 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 $11,350.
A deposit of $9,240, representing receipts of May 31, had been made too late to appear on the bank statement.
The bank had collected for Brentwood Bike Co. $4,890 on a note left for collection. The face of the note was $4,510.
A check for $580 returned with the statement had been incorrectly charged by the bank as $850.
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 $70.
A check for $1,130 from Jennings Co. was returned by the bank because of insufficient funds.

Instructions:

Question Content Area

1. 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.

2. If a balance sheet is prepared for Brentwood Bike Co. on May 31, what amount should be reported as cash?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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