Bank reconciliation and entries Instructions Chart of Accounts Amount Descriptions Instructions The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $85,920. The bank statement indicated a balance of $127,910 on June 30, 20Y1. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: a. Checks outstanding totaled $32,540. b. A deposit of $18,540, representing receipts of June 30, had been made too late to appear on the bank statement. c. The bank collected $29,425 on a $27,500 note, including interest of $1,925. d. A check for $1,350 returned with the statement had been incorrectly recorded by Pala Medical Co. as $135. The check was for the payment of an obligation to Skyline Supply Co. for a purchase on account. e. A check drawn for $570 had been erroneously charged by the bank as $750. f. Bank service charges for June amounted to $40. Instructions Bank reconciliation and entries Instructions Chart of Accounts Amount Descriptions Instructions d. A check for $1,350 returned with the statement had been incorrectly recorded by Pala Medical Co. as $135. The check was for the payment of an obligation to Skyline Supply Co. for a purchase on account. e. A check drawn for $570 had been erroneously charged by the bank as $750. f. Bank service charges for June amounted to $40. Instructions 1. Prepare a bank reconciliation. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. "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 Pala Medical Co. on June 30, 20Y1, what amount should be reported as cash? Bank reconciliation and entries Instructions Chart of Accounts Amount Descriptions Chart of Accounts Amount Descriptions CHART OF ACCOUNTS Pala Medical Co. Amount Descriptions General Ledger Adjusted balance Bank error in charging check as $750 instead of $570 ASSETS REVENUE Bank service charges 110 Cash 410 Sales Deposit in transit on June 30 111 Petty Cash 610 Interest Revenue Deposit of June 30, not recorded by bank 120 Accounts Receivable Error in recording check 131 Notes Receivable EXPENSES Outstanding checks 141 Merchandise Inventory 510 Cost of Merchandise Sold Note collected by bank, including $1,925 interest 145 Office Supplies 515 Credit Card Expense Total additions 146 Store Supplies 516 Cash Short and Over Total deductions Bank reconciliation and entries Instructions Chart of Accounts Amount Descriptions Chart of Accounts 131 Notes Receivable EXPENSES 141 Merchandise Inventory 510 Cost of Merchandise Sold 145 Office Supplies 515 Credit Card Expense 146 Store Supplies 516 Cash Short and Over 151 Prepaid Insurance 520 Salaries Expense 181 Land 531 Advertising Expense 191 Office Equipment 532 Delivery Expense 192 Accumulated Depreciation Office Equipment 533 Insurance Expense 534 Office Supplies Expense 193 Store Equipment 194 Accumulated Depreciation Store Equipment 535 Rent Expense 536 Repairs Expense LIABILITIES 537 Selling Expenses Bank reconciliation and entries Instructions Chart of Accounts Amount Descriptions Chart of Accounts LIABILITIES 537 Selling Expenses 538 Store Supplies Expense 211 Accounts Payable-Skyline Supply Co. 221 Notes Payable 222 Interest Payable 561 Depreciation Expense-Office Equipment 562 Depreciation Expense-Store Equipment 590 Miscellaneous Expense 231 Salaries Payable 241 Sales Tax Payable 710 Interest Expense EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends Instructions Chart of Accounts Amount Descriptions Bank Reconciliation Journal Final Question Journal Shaded cells have feedback. JOURNAL Score: 61/75 DATE ACCOUNTING FOLIATION ASSETS LIABILITIES EQUITY DESCRIPTION POST. REF. DEBIT CREDIT 1 Jun. 30 Cash 29,425.00 1 2 Jun. 30 Notes Receivable 27,500.00 3 Jun. 30 Interest Revenue 1,925.00 4 Accounts Payable-Skyline Supply Co. 1,215.00 5 Accounts Receivable 121,500.00 6 Cash 114,090.00 1 Points: 11.39 / 14 Bank Reconciliation Pala Medical Co. Score: 72/106 Bank Reconciliation June 30, 20Y1 1 Cash balance according to bank statement $127,910.00 2 Add: Deposit in transit on June 30 $18,540.00 3 Add: Bank error in charging check as $750 instead of $570 180.00 4 Total additions 18,720.00 5 Deduct: Outstanding checks 146,630.00 6 Adjusted balance $114,090.00 7 8 Cash balance according to company's records $85,920.00 9 Add: Note collected by bank, including $1,350 interest $29,425.00 10 Deduct: Total additions 1,215.00 Bank Reconciliation Shaded cells have feedback. 6 Adjusted balance $114,090.00 7 8 Cash balance according to company's records $85,920.00 9 Add: Note collected by bank, including $1,350 interest $29,425.00 10 Deduct: Total additions 1,215.00 11 Deduct: Error in recording check 40.00 12 Bank service charges 13 Adjusted balance $114,090.00 Points: 14.94 / 22 Feedback Instructions Chart of Accounts Amount Descriptions Bank Reconciliation Journal Final Question LI Shaded cells have feedback. Bank Reconciliation 10 Deduct: Total adations 1,215.00 11 Deduct: Error in recording check 40.00 12 Bank service charges 13 Adjusted balance $114,090.00 Points: 14.94 / 22 Feedback Check My Work Set up two sections: one for the company cash account section and the other for the bank balance section. Determine the effect of the data on each section. Recall that when you are finished, the adjusted balances in the bank and company sections of the reconciliation must be equal. If not, an item has been overlooked or treated in error. Recall that the company's cash account balance is updated for any items in the company section of the bank reconciliation