Question

Chart of Accounts Amount Descriptions Bank Reconciliation Journal Instructions The cash account for Capstone Medical Co. at November 30, 2016, indicated a balance of 585,920. The bank statement indicated a balance of $127,910 on November 30, 2016. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items A. Checks outstanding totaled $32,540 B. A deposit of $18,540, representing receipts of November 30, had been made too late to appear on the bank statement C. The bank collected $29.425 on a $27,500 note, including interest of $1,925. D. A check for $1,350 returned with the statement had been incorrectly recorded by Capstone Medical Co. as $135. The check was for the payment of an obligation to ABC Supply Co. for a purchase on account. E. A check drawn for $570 had been erroneously charged by the bank as $750 F. Bank service charges for November amounted to $40 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 were prepared for Capstone Medical Co. on November 30, 2016. what amount should be reported as cash? Check My Work 1 more Check My Work uses remaining Previous

Answer 1

Bank Reconciliation As of Nov 30, 2016 US $ US $ Balance per GL 85,920.00 Balance per Bank Statement $127,910.00 Add: Note collected by bank 29,425.00 Add: Deposit in Transit Cheque incorrectly charged by bank for $750 18,540.00 180.00 Total Additions 29,425.00 Total Additions 18,720.00 Deduct: Outstanding Cheques 32,540.00 Deduct: Bank Fee Cheque incorrectly recorded in GL 40.00 1,215.00 Total Deductions 1,255.00 Total Deductions 32,540.00 Adjusted GL Balance $ 114,090.00 Adjusted Bank Balance $ 114,090.00

Journal Entries Cash / Bank Account Notes Receivable Interest Income (Note Collected by bank) Dr Cr Cr $29,425.00 $27,500.00 $1,925.00 Bank Charges Cash / Bank Account (bank service charges) $40.00 $40.00 Accounts Payable Cash / Bank Account (cheque for ABC supplu co recorded incorrectly) Dr Cr $1,215.00 $1,215.00 Amount reported on Balance Sheet $114,090.00