Question 1: Prepare a bank reconciliation as of May 31. Be sure to complete the statement heading. Refer to the Labels and Amount Descriptions for the exact wording of text entries. “Deduct:” or “Add:” will automatically appear if it is required. Whenever there is more than one adjusting item in the bank portion of the reconciliation or the general ledger portion of the bank reconciliation, enter in the order presented in the instructions. Enter all amounts as positive numbers. BRENTWOOD BIKE CO. Bank Reconciliation
Question 1: Prepare a bank reconciliation as of May 31. Be sure to complete the statement heading. Refer to the Labels and Amount Descriptions for the exact wording of text entries. “Deduct:” or “Add:” will automatically appear if it is required. Whenever there is more than one adjusting item in the bank portion of the reconciliation or the general ledger portion of the bank reconciliation, enter in the order presented in the instructions. Enter all amounts as positive numbers. BRENTWOOD BIKE CO. Bank Reconciliation
Century 21 Accounting General Journal
11th Edition
ISBN:9781337680059
Author:Gilbertson
Publisher:Gilbertson
Chapter5: Cash Control Systems
Section: Chapter Questions
Problem 2AP
Related questions
Question
Question 1:
Prepare a bank reconciliation as of May 31. Be sure to complete the statement heading. Refer to the Labels and Amount Descriptions for the exact wording of text entries. “Deduct:” or “Add:” will automatically appear if it is required. Whenever there is more than one adjusting item in the bank portion of the reconciliation or the general ledger portion of the bank reconciliation, enter in the order presented in the instructions. Enter all amounts as positive numbers.
BRENTWOOD BIKE CO.
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Bank Reconciliation
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Cash balance according to bank statement
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Adjusted balance
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Cash balance according to company’s records
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Adjusted balance
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Question 2:
Journalize the necessary entries. The accounts have not been closed. Refer to the chart of accounts for the exact wording of the account titles. journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. journals will automatically indent a credit entry when a credit amount is entered.
JOURNAL
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Question 3: If a balance sheet is prepared for Brentwood Bike Co. on May 31, what amount should be reported as cash? $_________________
Info Needed to solve:
The cash account for Brentwood Bike Co. at May 1 indicated a balance of $34,250. During May, the total cash deposited was $140,300, and checks written totaled $138,880. The bank statement indicated a balance of $43,525 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 $6,440. |
b. | A deposit of $1,850 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. $5,250 on a note left for collection. The face of the note was $5,000. |
d. | A check for $390 returned with the statement had been incorrectly charged by the bank as $930. |
e. | A check for $210 returned with the statement had been recorded by Brentwood Bike Co. as $120. The check was for the payment of an obligation to Adkins Co. on account. |
f. | Bank service charges for May amounted to $30. |
g. | A check for $1,325 from Jennings Co. was returned by the bank due to insufficient funds. |
Required: | |
1. | Prepare a bank reconciliation as of May 31. Be sure to complete the statement heading. Refer to the Labels and Amount Descriptions for the exact wording of text entries. “Deduct:” or “Add:” will automatically appear if it is required. Whenever there is more than one adjusting item in the bank portion of the reconciliation or the general ledger portion of the bank reconciliation, enter in the order presented in the instructions. Enter all amounts as positive numbers. |
2. | Journalize the necessary entries. The accounts have not been closed. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. |
3. | If a balance sheet is prepared for Brentwood Bike Co. on May 31, what amount should be reported as cash? |
CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brentwood Bike Co. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Labels and Amount Descriptions
Labels | |
For the Month Ended May 31 | |
May 31 | |
Amount Descriptions | |
Bank error in charging check as $390 instead of $930 | |
Bank error in charging check as $930 instead of $390 | |
Bank service charges | |
Check returned because of insufficient funds | |
Company error in recording note collected by bank | |
Deposit of May 31, not recorded by bank | |
Error in recording check | |
Outstanding checks | |
Note and interest collected by bank |
Expert Solution
Step 1
Analysis and adjustment of differences between the cash balance shown on a bank statement, and the amount shown in the account holder's records. This matching process involves making allowances for checks issued but not yet presented and for checks deposited but not yet cleared or credited. And, if discrepancies persist, finding the cause and bringing the records into agreements"
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