The cash account for American Medical Co. at April 30 indicated a balance of $89,775. The bank statement indicated a balance of $125,160 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 $31,540. |
B. | A deposit of $18,000, representing receipts of April 30, had been made too late to appear on the bank statement. |
C. | The bank collected $24,075 on a $22,500 note, including interest of $1,575. |
D. | A check for $1,700 returned with the statement had been incorrectly recorded by American Medical Co. as $170. 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 $70. |
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? |
Get Answers For Free
Most questions answered within 1 hours.