I STARTED BUT I AM NOT SURE WHATS CORRECT Bank Reconciliation and Entries The ca

Question

I STARTED BUT I AM NOT SURE WHATS CORRECT

Bank Reconciliation and Entries

The cash account for Brentwood Bike Co. at May 1 indicated a balance of $13,930. During May, the total cash deposited was $70,330 and checks written totaled $65,300. The bank statement indicated a balance of $23,840 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 $10,620.

A deposit of $8,650, representing receipts of May 31, had been made too late to appear on the bank statement.

The bank had collected for Brentwood Bike Co. $4,570 on a note left for collection. The face of the note was $4,220.

A check for $360 returned with the statement had been incorrectly charged by the bank as $630.

A check for $630 returned with the statement had been recorded by Brentwood Bike Co. as $360. 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 $1,050 from Jennings Co. was returned by the bank because of insufficient funds.

Instructions:

1. Prepare a bank reconciliation as of May 31.

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.

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

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 $630 instead of $360 $ Deduct outstanding checks Adjusted balance $ Cash balance according to company's records $ Add note and interest collected by bank $ $ Deduct error in recording check Adjusted balance $

Explanation / Answer

If any doubt please comment

Brentwood Bike Co. 31-May Cash balance according to bank statement 23840 Add deposit of May 31, not recorded by bank 8650 Add bank error in charging check as $630 instead of $360 270 8920 32760 Deduct outstanding checks 10620 10620 Adjusted balance 22140 Cash balance according to company's records (13930+70330-65300) 18960 Add note and interest collected by bank 4570 4570 23530 Deduct: NSF 1050 Bank Service charge 70 Error in recording check 270 1390 Adjusted balance 22140 ans 2 Accounts title Dr Cr 1 Cash 4570 Notes receivable 4220 Interest Revenue 350 2 Accounts Receivable 1050 Cash 1050 3 Bank service charge/Misce;;eneous exp 70 Cash 70 4 Accounts payable 270 Cash 270 ans 3 Cash balance $22140

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