Bank Reconciliation and Entries The cash account for Brentwood Bike Co. at May 1 indicated a balance of $14,300. During May, the total cash deposited was $71,330 and checks written totaled $66,230. The bank statement indicated a balance of $24,180 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 $10,770. A deposit of $8,770, representing receipts of May 31, had been made too late to appear on the bank statement. The bank had collected for Brentwood Bike Co. $4,640 on a note left for collection. The face of the note was $4,280. A check for $270 returned with the statement had been incorrectly charged by the bank as $720. 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 $1,070 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.

Question

Bank Reconciliation and Entries

The cash account for Brentwood Bike Co. at May 1 indicated a balance of $14,300. During May, the total cash deposited was $71,330 and checks written totaled $66,230. The bank statement indicated a balance of $24,180 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 $10,770.
  2. A deposit of $8,770, 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. $4,640 on a note left for collection. The face of the note was $4,280.
  4. A check for $270 returned with the statement had been incorrectly charged by the bank as $720.
  5. 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.
  6. Bank service charges for May amounted to $70.
  7. A check for $1,070 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.

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