Question
Bank Reconciliation and Entries The cash account for American Medical Co. at April 30 indicated a balance of $12,935. The bank statement indicated a balance
Bank Reconciliation and Entries
The cash account for American Medical Co. at April 30 indicated a balance of $12,935. The bank statement indicated a balance of $14,660 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 $5,280.
- A deposit of $5,500, representing receipts of April 30, had been made too late to appear on the bank statement.
- The bank collected $2,860 on a $2,710 note, including interest of $150.
- 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 $90 had been erroneously charged by the bank as $900.
- Bank service charges for April amounted to $25.
Required:
1. Prepare a bank reconciliation.
American Medical Co. | ||
Bank Reconciliation | ||
April 30 | ||
Cash balance according to bank statement | $ | |
$ | ||
Adjusted balance | $ | |
Cash balance according to company's records | $ | |
$ | ||
Adjusted balance | $ |
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 | |||
b. April 30 | |||
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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