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Bank Reconciliation and Entries The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $14,555. The bank statement indicated a balance of $17,180 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 $6,180. b. A deposit of $6,440, representing receipts of June 30, had been made too late to appear on the bank statement. C. The bank collected $3,350 on a $3,180 note, including interest of $170. d. A check for $770 returned with the statement had been incorrectly recorded by Pala Medical Co. as $700. The check was for the payment of an obligation to Skyline Supply Co. for a purchase on account. e. A check drawn for $40 had been erroneously charged by the bank as $400. f. Bank service charges for June amounted to $35. Required: 1. Prepare a bank reconciliation. Pala Medical Co. 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 $400 instead of $40 17,108 6,440 360 Outstanding checks 6,180 Total adjustments Adjusted balance Adjusted balance 14,555 Cash balance according to company's records Adjustments: Proceeds of note collected by bank, including $170 interest Error in recording check. 3,350 4:10 70 Bank service charges 35 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. 3,350 a. 2011 June 30 Cash Notes Receivable 3,180 Interest Revenue 170 b. June 30 70 Accounts Payable-Skyline Supply Co. Miscellaneous Expense Cash 35 11 105 3. If a balance sheet were prepared for Pala Medical Co. on June 30, 20Y1, what amount should be reported as cash? Entries for Bad Debt Expense under the Direct Write-off and Allowance Methods The following selected transactions were taken from the records of Shipway Company for the first year of its operations ending December 31: Apr. 13 Wrote off account of Dean Sheppard, $2,330. May 15 Received $1,170 as partial payment on the $3,100 account of Dan Pyle. Wrote off the remaining balance as uncollectible. Received $2,330 from Dean Sheppard, whose account had been written off on April 13. Reinstated the account and recorded the cash July 27 receipt. Dec. 31 Wrote off the following accounts as uncollectible (record as one journal entry): Paul Chapman $1,560 Duane DeRosa 1,170 Teresa Galloway 700 Ernie Klatt 980 Marty Richey 350 Dec. 31 If necessary, record the year-end adjusting entry for the uncollectible accounts. For those amount boxes in which no entry is required, leave the box blank. If an entry is not required, select "No entry" from the dropdown box(es). a. Journalize the transactions under the direct write-off method. Apr. 13 Bad Debt Expense 2,330 Accounts Receivable-Dean Sheppard 2,330 May 15 Cash 1,170 Apr. 13 Bad Debt Expense 2,330 Accounts Receivable-Dean Sheppard 2,330 May 15 Cash 1,170 1,930 Bad Debt Expense Accounts Receivable-Dan Pyle 3,100 July 27-reinstate Accounts Receivable-Dean Sheppard 2,330 Bad Debt Expense 2,330 2,330 July 27-collection Cash Accounts Receivable-Dean Sheppard 2,330 Dec. 31-write-off Bad Debt Expense 4,760 1,560 1,170 Accounts Receivable-Paul Chapman Accounts Receivable-Duane DeRosa Accounts Receivable-Teresa Galloway Accounts Receivable-Ernie klatt Accounts Receivable-Marty Richey IIIDDD 700 980 350 Dec. 31-adjusting Allowance for Doubtful Accounts Accounts Receivable 4,760 Dec. 31-write-off Bad Debt Expense Accounts Receivable-Paul Chapman 1,560 Accounts Receivable-Duane DeRosa 1,170 700 Accounts Receivable-Teresa Galloway Accounts Receivable-Ernie klatt Accounts Receivable-Marty Richey llll 980 350 Dec. 31-adjusting Allowance for Doubtful Accounts Accounts Receivable b. Shipway Company uses the percent of credit sales method of estimating uncollectible accounts expense. Based on past history and industry averages, 3% of credit sales are expected to be uncollectible. Shipway Company recorded $379,100 of credit sales during the year. Journalize the transactions under the allowance method. Apr. 13 2,330 Allowance for Doubtful Accounts Accounts Receivable-Dean Sheppard 2,330 May 15 Cash 1,170 2015 1,930 Allowance for Doubtful Accounts Accounts Receivable-Dan Pyle 3,100 2,330 July 27-reinstate Accounts Receivable-Dean Sheppard Allowance for Doubtful Accounts 7720 b. Shipway Company uses the percent of credit sales method of estimating uncollectible accounts expense. Based on past history and industry averages, 3% of credit sales are expected to be uncollectible. Shipway Company recorded $379,100 of credit sales during the year. Journalize the transactions under the allowance method. Apr. 13 Allowance for Doubtful Accounts 2,330 Accounts Receivable-Dean Sheppard 2,330 May 15 Cash 1,170 Allowance for Doubtful Accounts 1,930 Accounts Receivable-Dan Pyle 3,100 July 27-reinstate 2,330 Accounts Receivable-Dean Sheppard Allowance for Doubtful Accounts 2,330 July 27-collection Cash 2,330 17:02 Jo Accounts Receivable-Dean Sheppard 2.330 4,760 Dec. 31-write-off Allowance for Doubtful Accounts Accounts Receivable-Paul Chapman 1,560 Receivable-Duane DeRosa 1,170 700 Accounts Receivable-Teresa Galloway Accounts Receivable-Ernie klatt Accounts Receivable-Marty Richey 980 350 Allowance for Doubtful Accounts 1,930 Accounts Receivable-Dan Pyle 3,100 July 27-reinstate 2,330 Accounts Receivable-Dean Sheppard Allowance for Doubtful Accounts 2,330 July 27-collection Cash 2,330 Accounts Receivable-Dean Sheppard 13 lill) 2,330 Dec. 31-write-off Allowance for Doubtful Accounts 4,760 1,560 1,170 Accounts Receivable-Paul Chapman Accounts Receivable-Duane DeRosa Accounts Receivable-Teresa Galloway Accounts Receivable-Ernie klatt Accounts Receivable-Marty Richey 700 980 350 Dec. 31-adjusting C. How much higher (lower) would Shipway Company's net income have been under the direct write-off method than under the allowance method? by $

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Please help me solve and explain this equation

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Bank Reconciliation and Entries The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $14,555. The bank statement indicated a balance of $17,180 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 $6,180. b. A deposit of $6,440, representing receipts of June 30, had been made too late to appear on the bank statement. C. The bank collected $3,350 on a $3,180 note, including interest of $170. d. A check for $770 returned with the statement had been incorrectly recorded by Pala Medical Co. as $700. The check was for the payment of an obligation to Skyline Supply Co. for a purchase on account. e. A check drawn for $40 had been erroneously charged by the bank as $400. f. Bank service charges for June amounted to $35. Required: 1. Prepare a bank reconciliation. Pala Medical Co. 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 $400 instead of $40 17,108 6,440 360 Outstanding checks 6,180 Total adjustments Adjusted balance Adjusted balance 14,555 Cash balance according to company's records Adjustments: Proceeds of note collected by bank, including $170 interest Error in recording check. 3,350 4:10 70 Bank service charges 35 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. 3,350 a. 2011 June 30 Cash Notes Receivable 3,180 Interest Revenue 170 b. June 30 70 Accounts Payable-Skyline Supply Co. Miscellaneous Expense Cash 35 11 105 3. If a balance sheet were prepared for Pala Medical Co. on June 30, 20Y1, what amount should be reported as cash? Entries for Bad Debt Expense under the Direct Write-off and Allowance Methods The following selected transactions were taken from the records of Shipway Company for the first year of its operations ending December 31: Apr. 13 Wrote off account of Dean Sheppard, $2,330. May 15 Received $1,170 as partial payment on the $3,100 account of Dan Pyle. Wrote off the remaining balance as uncollectible. Received $2,330 from Dean Sheppard, whose account had been written off on April 13. Reinstated the account and recorded the cash July 27 receipt. Dec. 31 Wrote off the following accounts as uncollectible (record as one journal entry): Paul Chapman $1,560 Duane DeRosa 1,170 Teresa Galloway 700 Ernie Klatt 980 Marty Richey 350 Dec. 31 If necessary, record the year-end adjusting entry for the uncollectible accounts. For those amount boxes in which no entry is required, leave the box blank. If an entry is not required, select "No entry" from the dropdown box(es). a. Journalize the transactions under the direct write-off method. Apr. 13 Bad Debt Expense 2,330 Accounts Receivable-Dean Sheppard 2,330 May 15 Cash 1,170 Apr. 13 Bad Debt Expense 2,330 Accounts Receivable-Dean Sheppard 2,330 May 15 Cash 1,170 1,930 Bad Debt Expense Accounts Receivable-Dan Pyle 3,100 July 27-reinstate Accounts Receivable-Dean Sheppard 2,330 Bad Debt Expense 2,330 2,330 July 27-collection Cash Accounts Receivable-Dean Sheppard 2,330 Dec. 31-write-off Bad Debt Expense 4,760 1,560 1,170 Accounts Receivable-Paul Chapman Accounts Receivable-Duane DeRosa Accounts Receivable-Teresa Galloway Accounts Receivable-Ernie klatt Accounts Receivable-Marty Richey IIIDDD 700 980 350 Dec. 31-adjusting Allowance for Doubtful Accounts Accounts Receivable 4,760 Dec. 31-write-off Bad Debt Expense Accounts Receivable-Paul Chapman 1,560 Accounts Receivable-Duane DeRosa 1,170 700 Accounts Receivable-Teresa Galloway Accounts Receivable-Ernie klatt Accounts Receivable-Marty Richey llll 980 350 Dec. 31-adjusting Allowance for Doubtful Accounts Accounts Receivable b. Shipway Company uses the percent of credit sales method of estimating uncollectible accounts expense. Based on past history and industry averages, 3% of credit sales are expected to be uncollectible. Shipway Company recorded $379,100 of credit sales during the year. Journalize the transactions under the allowance method. Apr. 13 2,330 Allowance for Doubtful Accounts Accounts Receivable-Dean Sheppard 2,330 May 15 Cash 1,170 2015 1,930 Allowance for Doubtful Accounts Accounts Receivable-Dan Pyle 3,100 2,330 July 27-reinstate Accounts Receivable-Dean Sheppard Allowance for Doubtful Accounts 7720 b. Shipway Company uses the percent of credit sales method of estimating uncollectible accounts expense. Based on past history and industry averages, 3% of credit sales are expected to be uncollectible. Shipway Company recorded $379,100 of credit sales during the year. Journalize the transactions under the allowance method. Apr. 13 Allowance for Doubtful Accounts 2,330 Accounts Receivable-Dean Sheppard 2,330 May 15 Cash 1,170 Allowance for Doubtful Accounts 1,930 Accounts Receivable-Dan Pyle 3,100 July 27-reinstate 2,330 Accounts Receivable-Dean Sheppard Allowance for Doubtful Accounts 2,330 July 27-collection Cash 2,330 17:02 Jo Accounts Receivable-Dean Sheppard 2.330 4,760 Dec. 31-write-off Allowance for Doubtful Accounts Accounts Receivable-Paul Chapman 1,560 Receivable-Duane DeRosa 1,170 700 Accounts Receivable-Teresa Galloway Accounts Receivable-Ernie klatt Accounts Receivable-Marty Richey 980 350 Allowance for Doubtful Accounts 1,930 Accounts Receivable-Dan Pyle 3,100 July 27-reinstate 2,330 Accounts Receivable-Dean Sheppard Allowance for Doubtful Accounts 2,330 July 27-collection Cash 2,330 Accounts Receivable-Dean Sheppard 13 lill) 2,330 Dec. 31-write-off Allowance for Doubtful Accounts 4,760 1,560 1,170 Accounts Receivable-Paul Chapman Accounts Receivable-Duane DeRosa Accounts Receivable-Teresa Galloway Accounts Receivable-Ernie klatt Accounts Receivable-Marty Richey 700 980 350 Dec. 31-adjusting C. How much higher (lower) would Shipway Company's net income have been under the direct write-off method than under the allowance method? by $