Bank Reconciliation and Entries The cash account for Pala Medical Co. at June 30, 2011, indicated a balance of $14,290. The bank statement indicated a balance of $16,330 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 $5,880. b. A deposit of $6,120, representing receipts of June 30, had been made too late to appear on the bank statement. c. The bank collected $3,180 on a $3,020 note, including interest of $160. d. A check for $440 returned with the statement had been incorrectly recorded by Pala Medical Co. as $400. The check was for the payment of an obligation to Skyline Supply Co. for a purchase on account. e. A check drawn for $90 had been erroneously charged by the bank as $900. f. Bank service charges for June amounted to $50. Required: 1. Prepare a bank reconciliation. Pala Medical Co. Bank Reconciliation Cash balance according to bank statement Adjustments: Deposit of June 30, not recorded by bank June 30, 20Y1 Bank error in charging check as $900 instead of $90 Outstanding checks Total adjustments Adjusted balance X X X Cash balance according to company's records Adjustments: Proceeds of note collected by bank, including $160 interest x Error in recording check. Bank service charges Total adjustments Adjusted balance X X 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. 20Y1 June 30 Cash Notes Receivable Interest Revenue x x x b. June 30 Accounts Payable-Skyline Supply Co. Miscellaneous Expense Cash 3. If a balance sheet were prepared for Pala Medical Co. on June 30, 20Y1, what amount should be reported as cash