28 Oct Checks outstanding totaled
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 canceled 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.
Amount Descriptions
Bank error in charging check as $240 instead of $420
Bank error in charging check as $420 instead of $240
Bank service charges
Check for $420 returned because of insufficient funds
Deposit of April 30, not recorded by bank
Error in recording check
Error in recording April 30 deposit
Outstanding checks
Note and interest collected by bank
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?
3. If a balance sheet is prepared for American Medical Co. on April 30, what amount should be reported as cash?
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