Question

The cash account for American Medical Co. at April 30 indicated a balance of $334,985. The bank statement indicated a balance of $388,600 on April 30. Comparing the bank statement and the accompanying cancelled checks and memos with the records revealed the following reconciling items.

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.

Question 1- Prepare a bank reconciliation.

Question 2- Journalize the necessary entries.The accounts have not been closed.

Question 3- If a balance sheet is prepared for American Medical Co. on April 30. What amount should be reported as cash?

Answer 1