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CHAPTER 8 HW: Q4

Bank Reconciliation and Entries

The cash account for Brentwood Bike at May 1 indicated a balance of \$13,570 During May, the total cash deposited was $68,870 and checks written totaled \$63,950 The bank statement indicated a balance of \$23,350 on Mgy 31. Comparing the bank statementthe canceled checksand the accompanying memos with the records revealed the following reconciling items aChecks outstanding totaled $10,400 b. A deposit of \$8,470 , representing receipts of May 31, had been made too late to appear on the bank statement The bank had collected for Brentwood Bike Co. $4,480 on a note left for collectionThe face of the note was \$4,130 . d. A check for 360 returned with the statement had been incorrectly charged by the bank as $630 . A check for $970 returned with the statement had been recorded by Brentwood Bike Co. as $790The check was for the payment of an obligation to Adkins Coon account . Bank service charges for May amounted to 70 A check for $1,030 from Jennings C_{0} was returned by the bank because of insufficient funds

Instructions: 1. Prepare a bank reconciliation as of May 31. Brentwood Bike Co. Bank Reconciliation May 31 Cash balance according to bank statement Adjusted balance Cash balance according to company's records ODIDO DO Adjusted balance 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. a. May 31 b. May 31 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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