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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
ASSETS
110 Cash
111 Petty Cash
120 Accounts Receivable
131 Notes Receivable
141 Merchandise Inventory
145 Office Supplies
146 Store Supplies
151 Prepaid Insurance
181 Land
191 Office Equipment
192 Accumulated Depreciation-Office Equipment
193 Store Equipment
194 Accumulated Depreciation-Store Equipment
LIABILITIES
211 Accounts Payable-Skyline Supply Co.
221 Notes Payable
222 Interest Payable
231 Salaries Payable
241 Sales Tax Payable
EQUITY
310 Common Stock
311 Retained Earnings
312 Dividends
REVENUE
410 Sales
610 Interest Revenue
EXPENSES
510 Cost of Goods Sold
515 Credit Card Expense
516 Cash Short and Over
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
710 Interest Expense

X

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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