### Bank Reconciliation and EntriesThe cash account for Brentwood Bike Co. at May 1 indicated a balance of $14,630. During May, the total cash deposited was $73,040 and checks written totaled $67,820. The bank statement indicated a balance of $24,760 on May 31. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:1. **Checks outstanding** totaled $11,030.2. **A deposit of $8,980**, representing receipts of May 31, had been made too late to appear on the bank statement.3. The bank had collected for Brentwood Bike Co. **$4,750** on a note left for collection. The face of the note was $4,380.4. A check for $580 returned with the statement had been incorrectly charged by the bank as $720.5. A check for $580 returned with the statement had been recorded by Brentwood Bike Co. as $580. The check was for the payment of an obligation to Adkins Co. on account.6. Bank service charges for May amounted to **$70**.7. A check for **$1,100** 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: - (Blank Space) (Dollar sign) - (Blank Space) (Description) (Blank Space) (Dollar sign) - Adjusted balance: - (Blank Space) (Dollar sign) - Cash balance according to company's records: - (Blank Space) (Dollar sign) - (Blank Space) (Description) (Blank Space) (Dollar sign) - Adjusted balance: - (Blank Space) (Dollar sign)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.- **Check My Work**- **Save and Exit** | **Submit Assignment for Grading**The layout provides spaces for financial calculations required for reconciling **Journalizing Transactions and Preparing a Balance Sheet****1. Adjusted Balance**- Input fields for adjusted balance details.**2. Journalize the Necessary Entries**- Entries that (a) increase cash and (b) decrease cash need to be journalized. The accounts must remain open. If a box does not require an entry for a compound transaction, leave it blank. a. **May 31** - Fields provided for entry details. b. **May 31** - Additional fields for entry details.**Feedback**- **Check My Work**: Provides feedback and guidance.- Remember that the company must journalize any adjusting items from the company section of the bank reconciliation that have not been previously recorded. Deductible items like bank service charges decrease cash. Items such as collections of notes or interest by the bank increase cash. Record adjustments accordingly.**3. Preparing a Balance Sheet**- When preparing a balance sheet for Brentwood Bike Co. on May 31, determine the amount to report as cash.**Feedback**- **Check My Work**: Offers feedback on the cash account balance update requirements.- Ensure the cash account balance is adjusted for items from the company section of the bank reconciliation.**Navigation and Submission**- Use "Check My Work" for feedback.- Options to save, exit, or submit the assignment for grading.- Navigation options include "Previous."**Interface Details**- The interface includes a sidebar with navigation options.- Current date and environmental details (e.g., temperature, weather) are displayed in the bottom right.

Balance as per Bank Statement 24760 Add: deposits in transit 8980 Add: error in recording…

The cash account for Brentwood Bike Co, at May 1 indicated a balance of $14,630. During May, the total cash deposited was $73,040 and checks written totaled $67,820. The bank statement indicated a balance of $24,760 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 $11,030. b. A deposit of $8,980, 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. $4,750 on a note left for collection. The face of the note was $4,380. d. A check for $270 returned with the statement had been incorrectly charged by the bank as $720. e. A check for $850 returned with the statement had been recorded by Brentwood Bike Co. as $580. The check was for the payment of an obligation to Adkins Co. on account. f. Bank service charges for May amounted to $70. g. A check for $1,100 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 dosed. For a compound transaction, if an amount box does not require an entry, leave it blank. A Mav 31C (Previous

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q