The cash account for Brentwood Bike Co. at May 1 indicated a balance of $13,360. During May, the total cash deposited was $67,250 and checks written totaled $62,440. The bank statement indicated a balance of $22,800 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 $10,150. A deposit of $8,270, representing receipts of May 31, had been made too late to appear on the bank statement. The bank had collected for Brentwood Bike Co. $4,370 on a note left for collection. The face of the note was $4,040. A check for $580 returned with the statement had been incorrectly charged by the bank as $850. 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. Bank service charges for May amounted to $70. A check for $1,010 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 $ Add deposit of May 31, not recorded by bank $ Add bank error in charging check as $850 instead of $580 $ Deduct outstanding checks Adjusted balance $ Cash balance according to company's records $ Add note and interest collected by bank $ Deduct check returned because of insufficient funds $ Deduct bank service charges Deduct error in recording check Adjusted balance
The cash account for Brentwood Bike Co. at May 1 indicated a balance of $13,360. During May, the total cash deposited was $67,250 and checks written totaled $62,440. The bank statement indicated a balance of $22,800 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 $10,150. A deposit of $8,270, representing receipts of May 31, had been made too late to appear on the bank statement. The bank had collected for Brentwood Bike Co. $4,370 on a note left for collection. The face of the note was $4,040. A check for $580 returned with the statement had been incorrectly charged by the bank as $850. 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. Bank service charges for May amounted to $70. A check for $1,010 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 $ Add deposit of May 31, not recorded by bank $ Add bank error in charging check as $850 instead of $580 $ Deduct outstanding checks Adjusted balance $ Cash balance according to company's records $ Add note and interest collected by bank $ Deduct check returned because of insufficient funds $ Deduct bank service charges Deduct error in recording check Adjusted balance
College Accounting (Book Only): A Career Approach
13th Edition
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:Scott, Cathy J.
Chapter6: Bank Accounts, Cash Funds, And Internal Controls
Section: Chapter Questions
Problem 5PA
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Question
The cash account for Brentwood Bike Co. at May 1 indicated a balance of $13,360. During May, the total cash deposited was $67,250 and checks written totaled $62,440. The bank statement indicated a balance of $22,800 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 $10,150.
- A deposit of $8,270, representing receipts of May 31, had been made too late to appear on the bank statement.
- The bank had collected for Brentwood Bike Co. $4,370 on a note left for collection. The face of the note was $4,040.
- A check for $580 returned with the statement had been incorrectly charged by the bank as $850.
- 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.
- Bank service charges for May amounted to $70.
- A check for $1,010 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 | $ | |
Add deposit of May 31, not recorded by bank | $ | |
Add bank error in charging check as $850 instead of $580 | ||
$ | ||
Deduct outstanding checks | ||
Adjusted balance | $ | |
Cash balance according to company's records | $ | |
Add note and interest collected by bank | ||
$ | ||
Deduct check returned because of insufficient funds | $ | |
Deduct bank service charges | ||
Deduct error in recording check | ||
Adjusted balance |
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