Bank Reconciliation and Entries The cash account for American Medical Co at April 30 indicated a balance of $11,030 The bank statement indicated a balance of $12,850 on April 30 Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items Checks outstanding totaled $4,630 A deposit of $4,820, representing receipts of April 30, had been made too late to appear on the bank statement The bank collected $2,510 on a $2,380 note, including interest of $130 A check for $880 returned with the statement had been incorrectly recorded by American Medical Co as $800 The check was for the payment of an obligation to Targhee Supply Co for a purchase on account A check drawn for $40 had been erroneously charged by the bank as $400 Bank service charges for April amounted to $60 Required 1 Prepare a bank reconciliation American Medical Co Bank Reconciliation April 30 Cash balance according to bank statement $ Add deposit of April 30, not recorded by bank $ Add bank error in charging check as $400 instead of $40 Deduct outstanding checks Adjusted balance $ Cash balance according to company's records $ Add note and interest collected by bank Deduct error in recording check $ Deduct bank service charges Adjusted balance $ Feedback 1 Set up two columns one for the company cash account section and the other for the bank balance section Determine the effect of the data on each column 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 2 Journalize the necessary entries (a ) that increase cash and (b ) that decrease cash The accounts have not been closed For a compound transaction, if an amount box does not require an entry, leave it blank a April 30 Cash Notes Receivable Interest Revenue b April 30 Notes Payable Miscellaneous Expense Cash 3 If a balance sheet is prepared for American Medical Co on April 30, what amount should be reported as cash $

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Bank Reconciliation and Entries The cash account for American Medical Co. at April 30 indicated a balance of $11,030. The bank statement indicated a balance

Bank Reconciliation and Entries

The cash account for American Medical Co. at April 30 indicated a balance of $11,030. The bank statement indicated a balance of $12,850 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:

Checks outstanding totaled $4,630.
A deposit of $4,820, representing receipts of April 30, had been made too late to appear on the bank statement.
The bank collected $2,510 on a $2,380 note, including interest of $130.
A check for $880 returned with the statement had been incorrectly recorded by American Medical Co. as $800. The check was for the payment of an obligation to Targhee Supply Co. for a purchase on account.
A check drawn for $40 had been erroneously charged by the bank as $400.
Bank service charges for April amounted to $60.

Required:

1. Prepare a bank reconciliation.

American Medical Co.
Bank Reconciliation
April 30
Cash balance according to bank statement		$
Add deposit of April 30, not recorded by bank	$
Add bank error in charging check as $400 instead of $40
Deduct outstanding checks
Adjusted balance		$
Cash balance according to company's records		$
Add note and interest collected by bank
Deduct error in recording check	$
Deduct bank service charges
Adjusted balance		$

Feedback

1. Set up two columns: one for the company cash account section and the other for the bank balance section. Determine the effect of the data on each column. 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.

2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. For a compound transaction, if an amount box does not require an entry, leave it blank.