Question

The cash account for Coastal Bike Co. at October 1, 20Y9, indicated a balance of $32,991. During October, the total cash deposited was $139,960, and checks written totaled $137,747. The bank statement indicated a balance of $43,370 on October 31, 20Y9. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:

a.	Checks outstanding totaled $6,476.
b.	A deposit of $1,779 representing receipts of October 31, had been made too late to appear on the bank statement.
c.	The bank had collected for Coastal Bike Co. $5,250 on a note left for collection. The face of the note was $5,000.
d.	A check for $580 returned with the statement had been incorrectly charged by the bank as $850.
e.	A check for $210 returned with the statement had been recorded by Coastal Bike Co. as $120. The check was for the payment of an obligation to Rack Pro Co. on account.
f.	Bank service charges for October amounted to $28.
g.	A check for $1,393 from Bay View Condos was returned by the bank due to insufficient funds.

	Instructions
1.	Prepare a bank reconciliation as of October 31, 20Y9. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. "Add:" & "Deduct:" will automatically appear if it is required. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
2.	Journalize the necessary entries. Refer to the Chart of Accounts for exact wording of account titles.
3.	If a balance sheet were prepared for Coastal Bike Co. on October 31, 20Y9, what amount should be reported as cash?

Answer 1

1. Bank Reconciliation

3. Cash to be recorded in Balance Sheet $35,204.