Question

Bank Reconciliation and Entries The cash account for American Medical Co. at April 30 indicated a balance of $10,945. The bank statement indicated a balance of $12,340 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 $4,440. b. A deposit of $4,630, representing receipts of April 30, had been made too late to appear on the bank statement. c. The bank collected $2,410 on a $2,280 note, including interest of $130. 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 $80 had been erroneously charged by the bank as $800. f. Bank service charges for April amounted to $35. Required: 1. Prepare a bank reconciliation American Medical Co. Bank Reconciliation April 30 Cash balance according to bank statement JU Adjusted balance Cash balance according to company's records

Answer 1

American Medical Co.
Bank Reconciliation
April 30
Cash balance according to bank statement		12,340
Deposit in transit	4,630
Correct of bank error	720	5,350
Outstanding checks		-4,440
Adjusted balanace		$13,250
Cash balance according to company's record		10,945
Bank collection of note and interest		2,410
Correction of book error	-70
Bank service charges	-35	-105
Adjusted balance		$13,250

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