Bank Reconciliation and Entries

The cash account for American Medical Co. at April 30 indicated a balance of $8,960. The bank statement indicated a balance of $10,190 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 $3,670.

B. A deposit of $3,820, representing receipts of April 30, had been made too late to appear on the bank statement.

C. The bank collected $1,990 on a $1,890 note, including interest of $100.

D. A check for $440 returned with the statement had been incorrectly recorded by American Medical Co. as $400. The check was for the payment of an obligation to Targhee Supply Co. for a purchase on account.

E. A check drawn for $60 had been erroneously charged by the bank as $600.

F. Bank service charges for April amounted to $30.

Required:

1. Prepare a bank reconciliation.

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.

3. If a balance sheet is prepared for American Medical Co. on April 30, what amount should be reported as cash?