1. Bank Reconciliation and Entries

   The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $10,055. The bank statement indicated a balance of $11,850 on June 30, 20Y1. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:

   1. Checks outstanding totaled $4,270.
   2. A deposit of $4,440, representing receipts of June 30, had been made too late to appear on the bank statement.
   3. The bank collected $2,310 on a $2,190 note, including interest of $120.
   4. 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.
   5. A check drawn for $30 had been erroneously charged by the bank as $300.
   6. Bank service charges for June amounted to $35.

   Required:

   Question Content Area

   1. Prepare a bank reconciliation.

   Pala Medical Co. Bank Reconciliation June 30, 20Y1

   Cash balance according to bank statement	blank	$fill in the blank f04de5f9efb501d_1
   Adjustments:	blank	blank
   Bank service chargesDeposit of June 30, not recorded by bankError in recording check.Proceeds of note collected by bank, including $120 interest	$- Select -
   Bank error in charging check as $300 instead of $30Bank service chargesError in recording check.Proceeds of note collected by bank, including $120 interest	- Select -	blank
   Bank service chargesError in recording check.Proceeds of note collected by bank, including $120 interestOutstanding checks	- Select -	blank
   Total adjustments	blank	fill in the blank f04de5f9efb501d_8
   Adjusted balance	blank	$fill in the blank f04de5f9efb501d_9
   Cash balance according to company's records	blank	$fill in the blank f04de5f9efb501d_10
   Adjustments:	blank	blank
   Bank error in charging check as $300 instead of $30Deposit of June 30, not recorded by bankProceeds of note collected by bank, including $120 interestOutstanding checks	$- Select -	blank
   Bank error in charging check as $300 instead of $30Deposit of June 30, not recorded by bankError in recording check.Outstanding checks	- Select -
   Bank error in charging check as $300 instead of $30Deposit of June 30, not recorded by bankBank service chargesOutstanding checks	- Select -	blank
   Total adjustments	blank	fill in the blank f04de5f9efb501d_17
   Adjusted balance	blank	$fill in the blank f04de5f9efb501d_18

   Question Content Area

   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	Accounts ReceivableCashInterest ReceivableInterest RevenueNotes Receivable	- Select -	- Select -
   	CashInterest PayableInterest ReceivableNotes PayableNotes Receivable	- Select -	- Select -
   	CashInterest PayableInterest ReceivableInterest RevenueNotes Payable	- Select -	- Select -
   b. June 30	Accounts Payable-Skyline Supply Co.Accounts Receivable-Skyline Supply Co.CashNotes PayablePetty Cash	- Select -	- Select -
   	Notes Receivable-Skyline Supply Co.CashMiscellaneous ExpenseNotes PayableCash Short or Over	- Select -	- Select -
   	Accounts Payable-Skyline Supply Co.Accounts Receivable-Skyline Supply Co.CashNotes PayablePetty Cash	- Select -	- Select -

   Question Content Area

   3. If a balance sheet were prepared for Pala Medical Co. on June 30, 20Y1, what amount should be reported as cash? $fill in the blank 9568f906803ff99_1

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