Bank Reconciliation and Entries Bank Reconciliation and Entries The cash account

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Bank Reconciliation and Entries

Bank Reconciliation and Entries The cash account for Brentwood Bike Co. at May 1 Indicated a balance of $13,790. During May, the total cash deposited was $68,79D and checks written totaled $63,870. The bank stabement Indicated a balance of $23,320 on May 31. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconcliling items: a. Checks outstanding totaled $10,390. b. A deposit of $8,460, representing recelpts of May 31, had been made too late to appear on the bank statement. c. The bank had collected for Brentwood Blke Co. $4,470 on a note left for collection. The face of the note was $4,130. d. A check for $270 retumed with the statement had been incorrectly charged by the bank as $720. e. A check for $630 retumed with the statement had been recorded by Brentwood Bike Co. as $360. 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 $1,030 from Jennings Co. was returned by the bank because of insuficlent funds.

Explanation / Answer

BrentWood Bike Co. Bank Reconciliation Cash balance according to Bank statement 23,320 Add:Deposits of May 31,not recorded by bank 8,460 Add:Bank error in charging checks as 720 instead of $270 450 8,910 32,230 Deduct:checks outstanding 10,390 Adjusted balance 21,840 Cash balance according to company records 18710 (13790+68790-63870) Add:collection of note 4,470 23180 Deduct: Error in recording cheque(630-360) 270 Bank service charge 40 NSF 1,030 1,340 Adjusted balance 21,840 2) Journal entries' a 31-May Cash 4,470 Note receivable 4,130 interest revenue 340 b. 31-May Accounts payable-Adkins co 270 Bank service charges/miscellneous exp 40 account receivable 1,030 cash 1,340 3) 21,840

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