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Bank Reconciliation and Entries The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $13,360. The bank statement indicated a

Bank Reconciliation and Entries

The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $13,360. The bank statement indicated a balance of $15,350 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 $5,530.
  2. A deposit of $5,760, representing receipts of June 30, had been made too late to appear on the bank statement.
  3. The bank collected $2,990 on a $2,840 note, including interest of $150.
  4. A check for $880 returned with the statement had been incorrectly recorded by Pala Medical Co. as $800. The check was for the payment of an obligation to Skyline Supply Co. for a purchase on account.
  5. A check drawn for $70 had been erroneously charged by the bank as $700.
  6. Bank service charges for June amounted to $60.

Required:

1. Prepare a bank reconciliation.

Pala Medical Co.
Bank Reconciliation
June 30, 20Y1
Cash balance according to bank statement $
Adjustments:
$
Total adjustments
Adjusted balance $
Cash balance according to company's records $
Adjustments:
$
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
b. June 30

3. If a balance sheet were prepared for Pala Medical Co. on June 30, 20Y1, what amount should be reported as cash?

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