Question
The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $14,110. The bank statement indicated a balance of $16,730 on
The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $14,110. The bank statement indicated a balance of $16,730 on June 30, 20Y1. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:
Checks outstanding totaled $6,020.
A deposit of $6,270, representing receipts of June 30, had been made too late to appear on the bank statement.
The bank collected $3,260 on a $3,100 note, including interest of $160.
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.
A check drawn for $30 had been erroneously charged by the bank as $300.
Bank service charges for June amounted to $40.
1. Prepare a bank reconciliation.
Pala Medical Co. | ||||||||||||||||||||||||||
Bank Reconciliation | ||||||||||||||||||||||||||
June 30, 20Y1 | ||||||||||||||||||||||||||
Cash balance according to bank statement | $ | |||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||
Deposit of June 30, not recorded by bank | $ | |||||||||||||||||||||||||
Bank error in charging check as $300 instead of $30 | ||||||||||||||||||||||||||
Outstanding checks | ||||||||||||||||||||||||||
Total adjustments | ||||||||||||||||||||||||||
Adjusted balance | $ | |||||||||||||||||||||||||
Cash balance according to company's records | $ | |||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||
Proceeds of note collected by bank, including $160 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.
| $
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started