Bank Reconciliation and Entries

The cash account for Online Medical Co. at June 30, 2014, indicated a balance of $8,920. The bank statement indicated a balance of $10,400 on June 30, 2014. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:

Checks outstanding totaled $3,740.

A deposit of $3,900, representing receipts of June 30, had been made too late to appear on the bank statement.

The bank had collected $2,030 on a note left for collection. The face of the note was $1,920.

A check for $770 returned with the statement had been incorrectly recorded by Online Medical Co. as $700. The check was for the payment of an obligation to Hirsch Co. for the purchase on account.

A check drawn for $30 had been erroneously charged by the bank as $300.

Bank service charges for June amounted to $50.

Required:

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1. Prepare a bank reconciliation.

Online Medical Co.

Bank Reconciliation

June 30, 2014

Cash balance according to bank statement

$

$

$

Adjusted balance

$

Cash balance according to company's records

$

$

$

Adjusted balance

$

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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.

b.

3. If a balance sheet were prepared for Online Medical Co. on June 30, 2014, what amount should be reported as cash?

$