The cash account for Valley Bike Co. on October 1, 2019, indicated a balance of $5,140. During October, the total cash deposited was $39,175, and checks written totaled $40,520. The bank statement indicated a balance of $8,980 on October 31, 2019. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items: Checks outstanding totaled $5,560. A deposit of $1,050 representing receipts of October 31 had been made too late to appear on the bank statement. The bank had collected for Valley Bike Co. $2,120 on a note left for collection. The face of the note was $2,000. A check for $370 returned with the statement had been incorrectly charged by the bank as $730. A check for $310 returned with the statement had been recorded by Valley Bike Co. as $130. The check was for the payment of an obligation to Sports Pro Co. on account. Bank service charges for October amounted to $25. A check for $880 from Overwatch Condos was returned by the bank due to insufficient funds. Prepare a bank reconciliation as of October 31, 2019. Journalize the necessary entries. If a balance sheet were prepared for Valley Bike Co. on October 31, 2019, what amount should be reported as cash?

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter5: Cash Control Systems

Section: Chapter Questions

Problem 2AP

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The cash account for Valley Bike Co. on October 1, 2019, indicated a balance of $5,140. During October, the total cash deposited was $39,175, and checks written totaled $40,520. The bank statement indicated a balance of $8,980 on October 31, 2019. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:
Checks outstanding totaled $5,560.
A deposit of $1,050 representing receipts of October 31 had been made too late to appear on the bank statement.
The bank had collected for Valley Bike Co. $2,120 on a note left for collection. The face of the note was $2,000.
A check for $370 returned with the statement had been incorrectly charged by the bank as $730.
A check for $310 returned with the statement had been recorded by Valley Bike Co. as $130. The check was for the payment of an obligation to Sports Pro Co. on account.
Bank service charges for October amounted to $25.
A check for $880 from Overwatch Condos was returned by the bank due to insufficient funds.

Prepare a bank reconciliation as of October 31, 2019.
Journalize the necessary entries.
If a balance sheet were prepared for Valley Bike Co. on October 31, 2019, what amount should be reported as cash?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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