Bank Reconciliation and Entries The cash account for Brentwood Bike Co. at May 1

Question

Bank Reconciliation and Entries The cash account for Brentwood Bike Co. at May 1 indicated a balance of $13,880. During May, the total cash deposited was $70,550 and checks written totaled $65,510. The bank statement indicated a balance of $23,920 on May 31. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling item:s a. Checks outstanding totaled $10,650. b. A deposit of $8,680, 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. $4,590 on a note left for collection. The face of the note was $4,230 d. A check for $580 returned with the statement had been incorrectly charged by the bank as $850. e. A check for $970 returned with the statement had been recorded by Brentwood Bike Co. as $790. The check was for the payment of an obligation to Adkins Co. on account. f. Bank service charges for May amounted to $50 g. A check for $1,060 from Jennings Co. was returned by the bank because of insufficient funds.

Explanation / Answer

ans 1 Bank Reconciliation as on March 31 Cash balance according to bank statement $23,920 Add:Deposit of May 31, not recorded by bank $8,680 Bank error in charging check as $850 instead of $580 270 8950 Deductions $32,870 Check Outstanding 10650 Adjusted Bank Balance $22,220 Company's Book Cash balance according to company's records 18920 (13880+70550-65510) Add Proceeds of note collected by bank, including $360 interest 4590 4590 23510 Deductions Error in recording check (970-790) 180 NSF 1060 Bank service charges 50 1290 Adjusted Book balance 22220 ans 2 Trans Accounts Tilte Dr Cr 31-Mar a Cash $4,680 Interest receivable 4320 Notes Receivable $360 b Accounts receivable $1,060 Accounts payable $180 Miscelleneous expenses 50 Cash $1,290 ans 3 Balance is $22220 If any doubt please comment

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