Question

In: Accounting

The cash account of the Malpractice Medical Company at May 31, 2019 is $35,670. The bank...

The cash account of the Malpractice Medical Company at May 31, 2019 is $35,670. The bank statement indicated a balance of $43,525 on May 31. Comparing the bank statement, the cancelled checks and the accompanying memos with the records revealed the following reconciling items:

  1. Checks outstanding totaled $6,440
  2. A deposit of $1,850 representing receipts of May 31, had been made too late to appear on the bank statement.
  3. The bank collected for Malpractice Medical $5,250 on a note left for collection. The face amount of the note was $5,000
  4. A check for $390 returned with the statement had been incorrectly charged by the bank as $930
  5. A check for #210 returned with the bank statement had been incorrectly recorded by Malpractice Medical as $120. The check was for the payment of an obligation to XYZ Company on account
  6. Bank service charges for May amounted to $30
  7. A check for $1,325 from DEF Company was returned by the bank due to insufficient funds

Required:

Prepare a bank reconciliation as of May 31, 2019

Journalize the necessary adjusting entries

Solutions

Expert Solution

Requirement 1

$

Bank Balance To Corrected Balance

Balance As Per Bank Statement

$43,525

Less: Checks Outstanding

-$6,440

Add: Deposits Outstanding

$1,850

Add: Bank Error In Recording Check

$540

Corrected Cash Balance

$39,475

Corrected Cash Balance

Book Balance To Corrected Balance

Balance As Per Books

$35,670

Add: Note & interest collected by bank

$5,250

Less: Error In Recording Check

-$90

Less: Service Charge

-$30

Less: Check returned by bank

-$1,325

Corrected Cash Balance

$39,475

Requirement 2

General Journal

Debit

Credit

1

Cash Account

$5,250

Note Receivable

$5,000

Interest Revenue

$250

2

Accounts Payables

$90

Accounts Payables

$1,325

Miscellaneous Expense - Bank Service Charge

$30

Cash

$1,445

ekkarill92 answered 3 months ago
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