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Bank reconciliation and entries The cash account for Brentwood Bike Co. at May 1 indicated a balance of $34,250. During May, the total cash deposited was $140,300, and d1ecks written totaled $ 138,880. The bank Statement indicated a balance of $43,525 o n May 31. Comparing the bank statement, the canceled checks, and the accompanying memos with me records revealed the following reconciling items: a. Checks outstanding totaled $6,440. b. A deposit of $1,850 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. $5,250 on a note left for collection. The face of the note was $5,000. d. A check for $390 returned with the statement had been incorrectly charged by the bank as $ 930. e. A check for $210 returned with the statement had been recorded by Brentwood Bike Co. as $120. The check was for the payment of an obligation to Adkins Co. on account. f. Bank service charges for May amounted to $30. g. A check for $1,325 from Jennings Co. was returned by the bank due to insufficient funds. Instructions 1. Prepare a bank reconciliation as of May 31. 2. Journalize the necessary entries. The accounts have not been closed. 3. If a balance sheet is prepared for Brentwood Bike Co. on May 31, what amount should be reported as cash?

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 8, Problem 8.4APR
Textbook Problem

Bank reconciliation and entries

The cash account for Brentwood Bike Co. at May 1 indicated a balance of $34,250. During May, the total cash deposited was $140,300, and d1ecks written totaled $ 138,880. The bank Statement indicated a balance of $43,525 o n May 31. Comparing the bank statement, the canceled checks, and the accompanying memos with me records revealed the following reconciling items:

  1. a. Checks outstanding totaled $6,440.
  2. b. A deposit of $1,850 representing receipts of May 31 had been made too late to appear on the bank statement.
  3. c. The bank had collected for Brentwood Bike Co. $5,250 on a note left for collection. The face of the note was $5,000.
  4. d. A check for $390 returned with the statement had been incorrectly charged by the bank as $ 930.
  5. e. A check for $210 returned with the statement had been recorded by Brentwood Bike Co. as $120. The check was for the payment of an obligation to Adkins Co. on account.
  6. f. Bank service charges for May amounted to $30.
  7. g. A check for $1,325 from Jennings Co. was returned by the bank due to insufficient funds.

Instructions

  1. 1. Prepare a bank reconciliation as of May 31.
  2. 2. Journalize the necessary entries. The accounts have not been closed.
  3. 3. If a balance sheet is prepared for Brentwood Bike Co. on May 31, what amount should be reported as cash?

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Chapter 8 Solutions

Accounting
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