Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

The cash account for Pala Medical Co at June 30, 2071, indicated a balance of $80.776. The bank statement indicated a balance of $125,160 on

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
The cash account for Pala Medical Co at June 30, 2071, indicated a balance of $80.776. The bank statement indicated a balance of $125,160 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 $31,540. b. A deposit of $18,000, representing receipts of June 30, had been made too late to appear on the bank statement. c. The bank collected $24,075 on a $22,500 note, including interest of $1.575. d. A check for $1,700 returned with the statement had been incorrectly recorded by Pala Medical Co as $170. The check was for the payment of an obligation to Skyline Supply Co. for a purchase on account, e Acheck drawn for $290 had been erroneously charged by the bank as $920. 1. Bank service charges for June amounted to $70. Instructions 1. Preparo a bank reconciliation. Refer to the Amount Descriptions Nst provided for the exact wording of the answer choices for text entries. "Add: & Deduct" will automatically appear if it is required. For those boxes in which you must enter subtracted or negative numbers use a minus sign 2. Journalize the necessary entries. Refer to the Chart of Accounts for exact wording of account titles 3. Il a balance sheet were prepared for Pala Medical Co. on June 30, 201, what amount should be reported as cash? Chart of Accounts ASSETS REVENUE 110 Cash 410 Sales 610 Interest Revenue 111 Petty Cash 120 Accounts Receivable 131 Notes Receivable 141 Merchandise Inventory 145 Office Supplies 146 Store Supplies EXPENSES 510 Cost of Merchandise Sold 515 Credit Card Expense 516 Cash Short and Over 151 Prepaid Insurance 181 Land 191 Office Equipment 192 Accumulated Depreciation Office Equipment 193 Store Equipment 194 Accumulated Depreciation Store Equipment 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Insurance Expense 534 Office Supplies Expense 535 Rent Expense 536 Repairs Expense 537 Selling Expenses 538 Store Supplies Expense 561 Depreciation Expense-Office Equipment 562 Depreciation Expense-Store Equipment 590 Miscellaneous Expense LIABILITIES 211 Accounts Payable-Skyline Supply Co. 221 Notes Payable 222 Interest Payable 231 Salaries Payable Chart of Accounts 146 Store Supplies 516 Cash Short and Over 151 Prepaid Insurance 520 Salaries Expense 181 Land 191 Office Equipment 192 Accumulated Depreciation Office Equipment 193 Store Equipment 194 Accumulated Depreciation Store Equipment 531 Advertising Expense 532 Delivery Expenso 533 Insurance Expense 534 Office Supplies Expense 535 Rent Expense 536 Repairs Expense 537 Selling Expenses 538 Store Supplies Expense 561 Depreciation Expense-Office Equipment 562 Depreciation Expense-Store Equipment 590 Miscellaneous Expense 710 Interest Expense LIABILITIES 211 Accounts Payable-Skyline Supply Co. 221 Notes Payable 222 Interest Payable 231 Salaries Payablo 241 Sales Tax Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends Amount Descriptions x Amount Descriptions Adjusted balance Bank error in charging check as $920 instead of $290 Bank service charges Deposit in transit on June 30 Deposit of June 30, not recorded by bank Error in recording check Outstanding checks Note collected by bank, including $1,575 interest Total additions Total deductions Bank Reconciliation Pala Medical Co. Bank Reconciliation June 30, 20Y1 1 Cash balance according to bank statement 2 2 3 4 5 6 7 8 Cash balance according to company's records 9 10 11 12 13 Journal 2. Journalize the necessary entries. Refer to the Chart of Accounts for exact wording of account titles PAGE 1 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 1 4 5 6 Final Question 3. If a balance sheet were prepared for Pala Medical Co. on June 30, 20Y1, what amount should be reported as cash? $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting

Authors: Carl s. warren, James m. reeve, Philip e. fess

21st Edition

978-0324188004

Students also viewed these Accounting questions