Bank Recondiliation and Entries The cash account for Brentwood Bike Co. at May 1

Question

Bank Recondiliation and Entries The cash account for Brentwood Bike Co. at May 1 indicated a balance of $13,310. During May, the total cash deposited was $66,640 and checks written totaled $61,880. The bank statement indicated a balance of $22,590 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 $10,060. b. A deposit of $8,200, 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. $4,330 on a note left for collection. The face of the note was $4,000. d. A check for $490 returned with the statement had been incorrectly charged by the bank as $940. e. A checdk for so70 returned with the statement had been recorded by Brentwood Bike Co as $5790. The check was for the payment of an obligation to Adkins Co. on account. f. Bank service charges for May amounted to $40. g. A check for $1,000 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

Explanation / Answer

Cash balance according to bank statement 22590 Add: Deposit not recorded by bnak 8200 Bank error [940-490] 450 8650    less:outstanding cheque 10060 10060   Adjusted balance 21180 Cash balance according to company records [13310+66640-61880] 18070 Add: Note collected by bank 4330 4330 less: bank charges 40 Non sufficient fund-cheque returned 1000 Error in recording cheque (970-790) 180 1220   Adjusted balance 21180

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