Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Thecashaccount for American Medical Co. at April 30 indicated a balance of $334,985. Thebank statementindicated a balance of $388,600 on April 30. Comparing the bank

Thecashaccount for American Medical Co. at April 30 indicated a balance of $334,985. Thebank statementindicated a balance of $388,600 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:

Instructions

A.

Checks outstanding totaled $61,280.

B.

A deposit of $42,500, representing receipts of April 30, had been made too late to appear on the bank statement.

C.

The bank collected $42,000 on a $40,000 note, including interest of $2,000.

D.

A check for $7,600 returned with the statement had been incorrectly recorded by American Medical Co. as $760. The check was for the payment of an obligation to Targhee Supply Co. for a purchase on account.

E.

A check drawn for $240 had been erroneously charged by the bank as $420.

F.

Bank service charges for April amounted to $145.

1.

Prepare a bank reconciliation. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries."Deduct:"or"Add:"will automatically appear if it is required.

2.

Journalize the necessary entries. The accounts have not been closed. Refer to the Chart of Accounts for exact wording of account titles.

3.

If a balance sheet is prepared for American Medical Co. on April 30, what amount should be reported as cash?

CHART OF ACCOUNTS

American 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-Targhee Supply Co.

221

Notes Payable

222

Interest Payable

231

Salaries Payable

241

Sales Tax Payable

EQUITY

310

Owner, Capital

311

Owner, Drawing

312

Income Summary

REVENUE

410

Sales

610

Interest Revenue

EXPENSES

510

Cost of Merchandise 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

Amount Descriptions

Bank error in charging check as $240 instead of $420

Bank error in charging check as $420 instead of $240

Bank service charges

Check for $420 returned because of insufficient funds

Deposit of April 30, not recorded by bank

Error in recording check

Error in recording April 30 deposit

Outstanding checks

Note and interest collected by bank

1. Prepare a bank reconciliation. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries."Deduct:"or"Add:"will automatically appear if it is required. Whenever there is more than one adjusting item in the bank portion of the reconciliation or the general ledger portion of the bank reconciliation, enter in the order presented in the instructions.

AMERICAN MEDICAL CO.

Bank Reconciliation

April 30

1

Cash balance according to bank statement

2

3

4

5

6

Adjusted balance

7

8

Cash balance according to company's records

9

10

11

12

13

Adjusted balance

2. Journalize the necessary entries. The accounts have not been closed. Refer to the Chart of Accounts for exact wording of account titles.

JOURNAL

ACCOUNTING EQUATION

DATE

DESCRIPTION

POST. REF.

DEBIT

CREDIT

ASSETS

LIABILITIES

EQUITY

1

2

3

4

5

6

3. If a balance sheet is prepared for American Medical Co. on April 30, 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 to Expert-Tailored 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

Using QuickBooks Online For Accounting 2022

Authors: Glenn Owen

5th Edition

0357516532, 9780357516539

More Books

Students also viewed these Accounting questions