The cash account for Brentwood Bike Co. at May 1 indicated a balance of $13,340. During May, the total cash deposited was $67,140 and checks are written totaled $62,340. The bank statement indicated a balance of $22,760 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 $10,140.
b. A deposit of $8,260, 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. $4,360 on a note left for collection. The face of the note was $4,030.
d. A check for $360 returned with the statement had been incorrectly charged by the bank as $630.
e. A check for $630 returned 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 the account.
f. Bank service charges for May amounted to $70.
g. A check for $1,010 from Jennings Co. was returned by the bank because of insufficient funds.
Introduction:
1. Prepare a bank reconciliation as of May 31.
2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. 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?