Question

The cash account for American Medical Co. at April 30 indicated a balance of $84,457. The bank statement indicated a balance of $127,190 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 $33,310. B. A deposit of $17,610, representing receipts of April 30, had been made too late to appear on the bank statement C. The bank collected $28,248 on a $26,400 note, including interest of $1.848. D. A check for $1,100 returned with the statement had been incorrectly recorded by American Medical Co. as $110. The check was for the payment of an obligation to Targhee Supply Co. for a purchase on account. E. A check drawn for $680 had been erroneously charged by the bank as $860. F. Bank service charges for April amounted to $45. 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

American Medical Co. BRS
Cash Balance according to statement		127190
Add: Deposit of april 30, not recorded by bank	17610
Add:-Bank Error in charging check as 860 instead of 680	180
Less:- Outstanding Checks	-33310	-15520
Adjusted Balance		111670
Cash Balance according to books		84457
Add:-
Note and interest collected by bank	28248
Less:-		28248
Error in recording check ( 1100 - 110 )	990
Bank service charges	45
		1035
Adjusted Balance		111670
Journal entries
Cash	28248
NOtes Receivable		26400
Interest revenue		1848
Accounts payable - Targhee supply co.	990
Cash		990
Bank service charges / Misc. exp.	45
Cash		45
$ 111670 would be reported as cash on balance sheet.