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Bank Reconciliation and Entries

The cash account for American Medical Co$.$ at April $30$ indicated a balance of $$13,315.$ The bank statement indicated a balance of $$15,100$ 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 $$5,440.$

b$.$ A deposit of $$5,660,$ representing receipts of April $30,$ had been made too late to appear on the bank statement.

c$.$ The bank collected $$2,940$ on a $$2,790$ note, including interest of $$150.$

d$.$ A check for $$770$ returned with the statement had been incorrectly recorded by American Medical Co$.$ as $$700.$ The check was for the payment of an obligation to Targhee Supply Co$.$ for a purchase on account.

e$.$ A check drawn for $$90$ had been erroneously charged by the bank as $$900.$

f$.$ Bank service charges for April amounted to $$55.$

Required:

Prepare a bank reconciliation.

American Medical Co$.$

Bank Reconciliation

April $30$

Cash balance according to bank statement

Add deposit of April $30,$ not recorded by bank

Add bank error in charging check as $$900$ instead of $$90$

Deduct outstanding checks

Adjusted balance

Cash balance according to company's records

Add note and interest collected by bank

Adjusted balance

$$25,670$

$

$9,760.$

$35,430$

$$17,465$

$$20,530$

$4,920$

$

$2.$ 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$.$ April $30$

b$.$ April $30$

$3.$ If a balance sheet is prepared for American Medical Co$.$ on April $30,$ what amount should be reported as cash?

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$3.$ Recall that the companys cash account balance is updated for any items in the company section of the bank reconciliation.

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