In both problems, ONLY completing the bank reconciliation portion.

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

1	Cash balance according to bank statement
2
3
4
5	Adjusted balance
6
7	Cash balance according to companys records
8
9
10
11
12	Adjusted balance

The cash account for Brentwood Bike Co. at May 1 indicated a balance of $32,527. During May, the total cash deposited was $139,121, and checks written totaled $135,890. The bank statement indicated a balance of $43,660 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 $6,625.
b.	A deposit of $1,888 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 $260 returned with the statement had been incorrectly charged by the bank as $620.
e.	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.
f.	Bank service charges for May amounted to $37.
g.	A check for $1,418 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?

Sunshine Interiors deposits all cash receipts each Wednesday and Friday in a night depository after banking hours. The data required to reconcile the bank statement as of July 31 have been taken from various documents and records and are reproduced as follows. The sources of the data are printed in capital letters. All checks were written for payments on account.

BANK RECONCILIATION FOR PRECEDING MONTH (DATED JUNE 30):
Cash balance according to bank statement	$9,422.80
Add deposit of June 30, not recorded by bank	780.80

Deduct outstanding checks:
No. 580	$310.10
No. 602	85.50
No. 612	92.50
No. 613	137.50		(625.60)
Adjusted balance			$9,578.00
Cash balance according to company's records			$9,605.70
Deduct bank service charges			(27.70)
Adjusted balance			$9,578.00
CASH ACCOUNT:
Balance as of July 1			$ 9,578.00
CASH RECEIPTS FOR MONTH OF JULY			6,465.42

DUPLICATE DEPOSIT TICKETS:
Date and amount of each deposit in July:
Date		Amount		Date		Amount		Date		Amount
July 2		$569.50		July 12		$580.70		July 23		$ 713.45
5		701.80		16		600.10		26		601.50
9		819.24		19		701.26		31		1,177.87

CHECKS WRITTEN:
Number and amount of each check issued in July:
Check No.		Amount		Check No.		Amount		Check No.		Amount
614		$243.50		621		$309.50		628		$837.70
615		350.10		622		Void		629		329.90
616		279.90		623		Void		630		882.80
617		395.50		624		707.01		631		1,081.56
618		435.40		625		158.63		632		325.40
619		320.10		626		550.03		633		310.08
620		238.87		627		381.73		634		241.71
Total amount of checks issued in July										$8,379.42

Click here to see JULY BANK STATEMENT.

Required:

Question Content Area

1. Prepare a bank reconciliation as of July 31. If errors in recording deposits or checks are discovered, assume that the errors were made by the company. Assume that all deposits are from cash sales. All checks are written to satisfy accounts payable. When required, enter amounts in dollars and cents.

Sunshine Interiors Bank Reconciliation July 31, 20Y5

Cash balance according to bank statement		$fill in the blank 0f4255064fa4fc1_1
Add deposit of July 31, not recorded by bankAdd error in recording check No. 627Add error in recording July 23 depositAdd principal of note collectedAdd interest on note collected		- Select -
Deduct deposit of July 31, not recorded by bankDeduct error in recording July 23 depositDeduct check returned because of insufficient fundsDeduct check no. 613Deduct interest on note collected	$- Select -
Deduct deposit of July 31, not recorded by bankDeduct error in recording July 23 depositDeduct check returned because of insufficient fundsDeduct check no. 628Deduct bank service charges	- Select -
Deduct error in July 23 depositDeduct error in recording check No. 627Deduct check returned because of insufficient fundsDeduct check no. 633Deduct bank service charges	- Select -	- Select -
Adjusted balance		$fill in the blank 0f4255064fa4fc1_11
Cash balance according to company's records		$fill in the blank 0f4255064fa4fc1_12
Add check returned because of insufficient fundsAdd check no. 628Add check no. 633Add bank service chargesAdd note and interest collected by bank	$- Select -
Add deposit of July 31, not recorded by bankAdd error in recording July 23 depositAdd check returned because of insufficient fundsAdd check no. 613Add check no. 633	- Select -
Add deposit of July 31, not recorded by bankAdd error in recording check No. 627Add check no. 613Add check no. 633Add bank service charges	- Select -	- Select -
Deduct deposit of July 31, not recorded by bankDeduct error in recording check No. 627Deduct error in recording July 23 depositDeduct check returned because of insufficient fundsDeduct interest on note collected	$- Select -
Deduct deposit of July 31, not recorded by bankDeduct error in recording check No. 627Deduct error in recording July 23 depositDeduct interest on note collectedDeduct bank service charges	- Select -	- Select -
Adjusted balance		$fill in the blank 0f4255064fa4fc1_25

Question Content Area

2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. When required, enter amounts in dollars and cents. If an amount box does not require an entry, leave it blank.

a. 20Y5 July 31	Accounts ReceivableCashInterest RevenueNotes ReceivableSales	- Select -	- Select -
	Accounts ReceivableCashInterest PayablePetty CashNotes Receivable	- Select -	- Select -
	Accounts ReceivableCashInterest ExpenseInterest RevenueUnearned Interest	- Select -	- Select -
	Accounts ReceivableCashInterest PayableInterest ReceivableSales	- Select -	- Select -
	Accounts PayableAccounts ReceivableCashInterest ExpenseCash Short and Over	- Select -	- Select -
b. July 31	Accounts PayableAccounts ReceivableCash Short or OverPetty CashInterest Receivable	- Select -	- Select -
	Accounts PayableCash Over and ShortMiscellaneous ExpenseMiscellaneous Administrative RevenuePetty Cash	- Select -	- Select -
	Accounts PayableAccounts ReceivableCashMiscellaneous RevenueCash Short and Over	- Select -	- Select -

Question Content Area

3. What is the amount of Cash that should appear on the balance sheet as of July 31? $fill in the blank 834fcafe7001fbb_1

4. Assume that a canceled check for $180 has been incorrectly recorded by the bank as $1,800. Select how the error would be included in a bank reconciliation and how it should be corrected.

Treatment	Not included in a bank reconciliationAddition to cash per depositor's recordsDeduction from cash per bank statementDeduction from cash per depositor's recordsAddition to cash per bank statement
To correct	Journalize a correcting entry adding $1,800 to cashJournalize an entry deducting $1,620 from cashRequest that the bank correct the errorJournalize an entry adding $1,620 to cashJournalize an entry deducting $1,800 from cash