Bank Reconciliation and Entries The cash account for Pala Medical Co. at June 30, 201, indicated a balance of $11,640. The bank statement indicated a balance of $13,540 on June 30, 2011. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: a. Checks outstanding totaled $4,870. b. A deposit of $5,080, representing receipts of June 30, had been made too late to appear on the bank statement c. The bank collected $2,640 on a $2,500 note, including interest of $140. 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 $50 had been erroneously charged by the bank as $500. f. Bank service charges for June amounted to $40. Required: 1. Prepare a bank reconciliation Pala Medical Co. 13,540 Bank Reconciliation June 30, 2011 Cash balance according to bank statement Adjustments: Deposit of June 30, not recorded by bank Bank error in charging check as $500 instead of $50 Outstanding checks 5,080 450 -4,870 Total adjustments Adjusted balance Cash balance according to company's records Adjustments: Proceeds of note collected by bank, including $140 interest Error in recording check. Bank service charges Total adjustments 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. 20Y1 June 30 Cash Notes Receivable Interest Revenue 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, 2011, what amount should be reported as cash