The cash account for Coastal Bike Co. at October 1, 20Y9, indicated a balance of $5,140. During October, the total cash deposited was $39,175, and checks written totaled $40,520. The bank statement indicated a balance of $8,980 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 $5,560.b. A deposit of $1,050 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. $2,120 on a note left for collection. The face of the note was $2,000.d. A check for $370 returned with the statement had been incorrectly charged by the bank as $730.e. A check for $310 returned with the statement had been recorded by Coastal Bike Co. as $130. The check was for the payment of an obligation to Rack Pro Co. on account. f. Bank service charges for October amounted to $25.g. A check for $880 from Bay View Condos was returned by the bank due to insufficient funds. Instructions1. 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?

Explanation:

Cash balance   -               5,140

Add cash deposited      39,175

Deduct check written   (40,520)

Cash balance                    3,795

      Bank reconciliation for Coastal Bile for the month ended October 31

Cash balance in bank statement -              8980

Deposit not recorded                    ( 1050)

Bank error on check (730-370)        (360)

Outstanding check                           5,560

Adjustment                                                        (4,150)

New balance                                                      4,830

Cash balance                                                      3,795

Note received by bank                     2,120

Bank charges                                      (25)

Returned check                                  (880)

Error in returned check                       (180)

Adjustment                                                            (1,035)

New balance                                                          2760            

2

                                              Journal entries        

Description                                         Dr                            Cr

Cash                                                2,120

Note receivable                                                                 2,000

Interest income                                                                      120

Accounts payable  (Rack pro)             180

Accounts receivable (condos)             880  

Bank charges                                         25

Cash                                                                                     1,085        

3

Cash  in Balanced sheet  = Adjusted balance in the reconciliation

2,760    

a

explanation:

reducti0n

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