The cash account for Brentwood Bike Co. at May 1 indicated a balance of $14,780. During May, the total cash deposited was $74,870 and checks written totaled $69,550. The bank statement indicated a balance of $25,380 on May 31. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items: Checks outstanding totaled $11,310.
A. A deposit of $9,210, representing receipts of May 31, had been made too late to appear on the bank statement.
B. The bank had collected for Brentwood Bike Co. $4,870 on a note left for collection. The face of the note was $4,490.
C. A check for $360 returned with the statement had been incorrectly charged by the bank as $630.
D. A check for $850 returned with the statement had been recorded by Brentwood Bike Co. as $580.
E. The check was for the payment of an obligation to Adkins Co. on account.
F. Bank service charges for May amounted to $60.
G. A check for $1,120 from Jennings Co. was returned by the bank because of insufficient funds.
Instructions:
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 were prepared for Brentwood Bike Co. on May 31, what amount should be reported as cash?