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The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $9,335....

The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $9,335. The bank statement indicated a balance of $10,710 on June 30, 20Y1. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: Checks outstanding totaled $3,860. A deposit of $4,020, representing receipts of June 30, had been made too late to appear on the bank statement. The bank collected $2,090 on a $1,980 note, including interest of $110. A check for $550 returned with the statement had been incorrectly recorded by Pala Medical Co. as $500. The check was for the payment of an obligation to Skyline Supply Co. for a purchase on account. A check drawn for $50 had been erroneously charged by the bank as $500. Bank service charges for June amounted to $55. Required: 1. Prepare a bank reconciliation. Pala Medical Co. Bank Reconciliation June 30, 20Y1 Cash balance according to bank statement $ Adjustments: $ Total adjustments Adjusted balance $ Cash balance according to company's records $ Adjustments: $ Total adjustments Adjusted balance $ 2.

Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. For a compound transaction, if an amount box does not require an entry, leave it blank. a. 20Y1 June 30 b. June 30 3. If a balance sheet were prepared for Pala Medical Co. on June 30, 20Y1, what amount should be reported as cash? $ PreviousNext

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Answer-

Pala Medical Co.
Bank Reconciliation
June 30, 20Y1
Cash balance according to bank statement $10,710
Adjustments:
Deposit of June 30, not recorded by bank $4,020   
Outstanding checks -$3,860
Bank error in charging check as $50 instead of $500 450
Total Adjustment $610
Adjusted cash balance according to bank statement $11,320
Cash balance according to company’s records $9,335
Adjustments:
Proceeds of note collected by bank, including $110 interest    $2,090
Error in recording check -$50
Bank service charges -$55 $1,985
$11,320

2) Preparing the Journal Entries:

Event    General Journal    Debit Credit
a) June 30 Cash $2,090
Notes Receivable $1,980
Interest Revenue $110
b) June 30 Accounts Payable- Skyline Supply Co. $50
Bank service charges $55
Cash $105

3-If a balance sheet were prepared for Pala Medical Co. on June 30, 20Y1,

amount that should be reported as cash $11,320

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