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The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $166,436. The bank statement indicated a balance of $195,688 on
The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $166,436. The bank statement indicated a balance of $195,688 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 $19,427. |
b. | A deposit of $12,300, representing receipts of June 30, had been made too late to appear on the bank statement. |
c. | The bank collected $26,500 on a $25,000 note, including interest of $1,500. |
d. | A check for $4,000 returned with the statement had been incorrectly recorded by Pala Medical Co. as $400. The check was for the payment of an obligation to Skyline Supply Co. for a purchase on account. |
e. | A check drawn for $195 had been erroneously charged by the bank as $915. |
f. | Bank service charges for June amounted to $55. |
Required:
1. | Prepare a bank reconciliation. |
2. | Journalize the necessary entries. |
3. | If a balance sheet were prepared for Pala Medical Co. on June 30, 20Y1, what amount should be reported as cash? |
CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pala Medical Co. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Labels and Amount Descriptions
Labels | |
For the Month Ended June 30, 20Y1 | |
June 30, 20Y1 | |
Amount Descriptions | |
Adjusted balance | |
Bank error in charging check as $915 instead of $195 | |
Bank service charges | |
Deposit in transit on June 30 | |
Error in recording check | |
Note collected by bank, including $1,500 interest | |
Outstanding checks | |
Total additions | |
Total deductions |
Labels | |
For the Month Ended June 30, 20Y1 | |
June 30, 20Y1 | |
Amount Descriptions | |
Adjusted balance | |
Bank error in charging check as $915 instead of $195 | |
Bank service charges | |
Deposit in transit on June 30 | |
Error in recording check | |
Note collected by bank, including $1,500 interest | |
Outstanding checks | |
Total additions | |
Total deductions |
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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