8-3A

PR 8-3A Bank reconciliation and entries OBJ. 5 The cash account for American Medical Co. at April 30 indicated a balance of $334,985. The bank statement indicated a balance of $388,600 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: a. Checks outstanding totaled $61,280. b. A deposit of $42,500, representing receipts of April 30, had been made too late to appear on the bank statement. c. The bank collected $42,000 on a $40,000 note, including interest of $2,000. d. A check for $7,600 returned with the statement had been incorrectly recorded by American Medical Co. as $760. The check was for the payment of an obligation to Targhee Supply Co. for a purchase on account. e. A check drawn for $240 had been erroneously charged by the bank as $420. f. Bank service charges for April amounted to $145. Instructions 1. Prepare a bank reconciliation. 2. Journalize the necessary entries. The accounts have not been closed. 3. If a balance sheet is prepared for American Medical Co. on April 30, what amount should be reported as cash? AMERICAN MEDICAL CO. Bank Reconciliation April 30 Cash balance according to bank statement Add: Deduct: Adjusted balance Cash balance according to company's records Add: Deduct: Adjusted balance April 30 30 Amount to be reported on April 30 balance sheet