Question

Bank Reconciliation and Entries The cash account for Brentwood Bike Co. at May 1 indicated a balance of $13,630. During May, the total cash deposited was $67,810 and checks written totaled $62,960. The bank statement indicated a balance of $22,990 on May 31. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items: a. Checks outstanding totaled $10,240. b. A deposit of $8,340, 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. $4,410 on a note left for collection. The face of the note was $4,070 d. A check for $270 returned with the statement had been incorrectly charged by the bank as $720. e. A check for $410 returned with the statement had been recorded by Brentwood Bike Co. as $140. The check was for the payment of an obligation to Adkins Co. on account. 1. Bank service charges for May amounted to $60. 9. A check for $1,020 from Jennings Co. 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 Previous

Answer 1

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Naming convention list is not available, can be slightly different: Solution: Bank Reconciliation Particulars Cash Balance according to Bank statement Add: Deposit of May 31, not recorded by bank Add: Bank error in charging check as $720 instead of $270 Deduct: outstanding checks Adjusted Balance Cash balance according to company's records (13630)+(67810) - (62960) Add: Note and Interest collected by bank Total $ 22,990 $ 8,340 $ 450 $ 8,790 $ 31,780 $ 10,240 $ 21,540 $ 18,480 $ 4,410 $ 22,890 $ 1,020 $ 270 $ 60 $ 1,350 $ 21,540 Deduct: Check returned because of insufficient funds (NSF) Deduct: Error in recording check (410-140) Deduct: Bank Service charges Adjusted Balance

2) Note: Ignore the explanation lines while putting answer in the JE Answer format as per question requirement. Jounal entries Credit Date May.31 Debit $ 4,410 $ 4,070 $ 340 Account title and explaination Cash Note Receivable Interest Revenue (To record the Increase in cash) Miscellaneous Expense Accounts Receivable-Jennings Co. Accounts Payable-Adkins Co. Cash (To record the Decrease in cash) May.31 $ 60 $ 1,020 $ 270 $ 1,350 $ 21,540 Cash should be reported as adjusted cash balance. (refer part 1)