The cash account for Norwegian Medical Co. at April 30 indicated a balance of $9,980. The bank statement indicated a balance of $11,620 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:

Checks outstanding totaled $4,180.

A deposit of $4,360, representing receipts of April 30, had been made too late to appear on the bank statement.

The bank collected $2,270 on a $2,150 note, including interest of $120.

A check for $660 returned with the statement had been incorrectly recorded by Norwegian Medical Co. as $600. The check was for the payment of an obligation to Universal Supply Co. for a purchase on account.

A check drawn for $40 had been erroneously charged by the bank as $400.

Bank service charges for April amounted to $30.

Required:

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1. Prepare a bank reconciliation.

Norwegian Medical Co. Bank Reconciliation April 30

Cash balance according to bank statement		$fill in the blank e38ab4fd703f005_1
Add bank service chargesAdd deposit of April 30, not recorded by bankAdd error in recording checkAdd outstanding checksAdd note and interest collected by bankAdd deposit of April 30, not recorded by bank	$Add deposit of April 30, not recorded by bank
Add bank error in charging check as $400 instead of $40Add error in recording checkAdd outstanding checksAdd note and interest collected by bankDeduct bank service chargesAdd bank error in charging check as $400 instead of $40	Add bank error in charging check as $400 instead of $40	Add bank error in charging check as $400 instead of $40
Deduct bank error in charging check as $400 instead of $40Deduct bank service chargesDeduct error in recording checkDeduct outstanding checksDeduct note and interst collected by bankDeduct outstanding checks		Deduct outstanding checks
Adjusted balance		$fill in the blank e38ab4fd703f005_9
Cash balance according to company's records		$fill in the blank e38ab4fd703f005_10
Add bank error in charging check as $400 instead of $40Add bank service chargesAdd deposit of April 30, not recorded by bankAdd error in recording checkAdd note and interest collected by bankAdd note and interest collected by bank		Add note and interest collected by bank
Deduct bank error in charging check as $400 instead of $40Deduct deposit of April 30, not recorded by bankDeduct error in recording checkDeduct outstanding checksDeduct note and interst collected by bankDeduct note and interst collected by bank	$Deduct note and interst collected by bank
Deduct bank error in charging check as $400 instead of $40Deduct bank service chargesDeduct deposit of April 30, not recorded by bankDeduct outstanding checksDeduct note and interst collected by bankDeduct bank service charges	Deduct bank service charges	Deduct bank service charges
Adjusted balance		$fill in the blank e38ab4fd703f005_18

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2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. If an amount box does not require an entry, leave it blank.

a. April 30	Accounts ReceivableCashInterest ReceivableInterest RevenueNotes Receivable	- Select -	- Select -
	CashInterest PayableInterest ReceivableNotes PayableNotes Receivable	- Select -	- Select -
	CashInterest PayableInterest ReceivableInterest RevenueNotes Payable	- Select -	- Select -
b. April 30	Accounts Payable-Universal Supply Co.Accounts Receivable-Universal Supply Co.CashNotes PayablePetty Cash	- Select -	- Select -
	CashCash Short and OverMiscellaneous ExpenseNotes PayableNotes Receivable-Universal Supply Co.	- Select -	- Select -
	Accounts Payable-Universal Supply Co.Accounts Receivable-Universal Supply Co.CashNotes PayablePetty Cash	- Select -	- Select -

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2. Keep in mind that the company needs to journalize any adjusting items in the company section of the bank reconciliation, because these have not been previously recorded by the company. Debit memo items like bank service charges decrease Cash. Items that come from credit memos like collections of notes or interest by the bank increase cash. If the company made an error that overstates or understates cash in the company section, the journal adjustment would decrease Cash or increase Cash, respectively.

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3. If a balance sheet is prepared for Norwegian Medical Co. on April 30, what amount should be reported as cash? $fill in the blank ced284fe8030fbd_1

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