Question

Bank reconciliation and entries

Instructions

Chart of Accounts

Amount Descriptions

Bank Reconciliation

Journal

Final Question

X

Instructions

The cash account for American Medical Co. at April 30 indicated a balance of $97,456. The bank statement indicated a balance of $127,960 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:

A.	Checks outstanding totaled $30,050.
B.	A deposit of $19,720, representing receipts of April 30, had been made too late to appear on the bank statement.
C.	The bank collected $22,149 on a $20,700 note, including interest of $1,449.
D.	A check for $1,450 returned with the statement had been incorrectly recorded by American Medical Co. as $145. The check was for the payment of an obligation to Targhee Supply Co. for a purchase on account.
E.	A check drawn for $290 had been erroneously charged by the bank as $920.
F.	Bank service charges for April amounted to $40.

	Instructions
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?

Answer 1

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Part -1
	Cash Balance according to Bank Statement		$127,960			Cash Balance according to company records		$ 97,456
	Adjustments:					Adjustments:
	Outstanding Checks	$ -30,050				Note Receivable including interest	$ 22,149
	Deposit in transit	$ 19,720				Returned check recorded by less amount (1450-145)	$   -1,305
	Bank error in charging check (920-290)	$       630				Bank Service Charge	$        -40
	Total Adjustments		$   -9,700			Total Adjustments		$ 20,804
	Adjusted Balance		$118,260			Adjusted Balance		$118,260
								$           -
Part -2
Date	Account	Debit	Credit
Jun 30	Cash	$ 22,149
	Note Receivable		$ 20,700
	Interest Revenue		$    1,449
Jun 30	Accounts Payable-Targhee	$    1,305
	Miscellaneous Expenses	$         40		Bank Service Charge
	Cash		$    1,345
Part -3
	Cash balance to be reported		$118,260