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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 $14,410. During May, the total cash deposited was $72,900 and checks written totaled $67,690. The bank statement indicated a balance of $24,710 on May 31. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:

  1. Checks outstanding totaled $11,010.
  2. A deposit of $8,970, representing receipts of May 31, had been made too late to appear on the bank statement.
  3. The bank had collected for Brentwood Bike Co. $4,740 on a note left for collection. The face of the note was $4,370.
  4. A check for $360 returned with the statement had been incorrectly charged by the bank as $630.
  5. A check for $410 returned with the statement had been recorded by Brentwood Bike Co. as $140. The check was for the payment of an obligation to Adkins Co. on account.
  6. Bank service charges for May amounted to $60.
  7. A check for $1,090 from Jennings Co. was returned by the bank because of insufficient funds.


1.  Prepare a bank reconciliation as of May 31.

Brentwood Bike Co.
Bank Reconciliation
May 31
Cash balance according to bank statement   $
Adjusted balance   $
Cash balance according to company's records   $
Adjusted balance   $

2.  Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. For a compound transaction, if an amount box does not require an entry, leave it blank.

a. May 31      
b. May 31      

Sep 22 2020 Read more Less More

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