Question

Chart of Accounts Amount Descriptions Bank Reconciliation Journal Final Question Instructions The cash account for American Medical Co. 1 April 30 indicated a balance of $394,965. The bank statement indicated a balance of 5368,600 on April 30. Comparing the bank statement and the accompanying canceled checks and memes with the records revealed the following reconciling Home A Checks outstanding totaled 561,200 B. A deposit of $42.500, representing receipts of April 30. had been made too late to appear on the bank statement C. The bark collected $42,000 on a $10,000 note, including interest of $2,000 D. A check for $7.600 returned with the statement had been incorrectly recorded by American Medical Co, S70. The check was for the payment of an obligation to Turhee Supply Co. for a purchase on count E Acheckdrawn for $240 had been erroneously charged by the bank as $420 F. Bark service charges for priamounted to $145 Instructions

Answer 1

AMERICAN MEDICAL CO. Bank Reconciliation Apr-30 Cash balance according to bank statement Add: Deposit of April 30, not recorded by bank Add: Bank error in charging check as $420 instead of $240 $ 388,600 $ 42,500 $ 180$ 42,680 $ 431,280 $ 61,280 $ 370,000 Deduct: Outstanding checks Adjusted balance Cash balance according to company's records Add: Note and interest collected by bank $ 334,985 $ 42.000 $ 376,985 $ 6,840 $ 145$ 6,985 $ 370,000 Deduct: Error in recording check ($7,600-$760) Deduct: Bank service charges Adjusted balance

Credit Debit $ 42,000 Date Account Titles and Explanation 30-Apr Cash Note Receivable Interest Revenue (To record the collection of note) $ 40,000 $ 2,000 $6,840 $ 145 30-Apr Accounts Payable Miscellneous expense Cash |(To record the entries that decreases cash) $6,985 Amount to be reported as cash is $370,000.

Credit Debit $ 17,910 Date Account Titles and Explanation Jan-19 Accounts Receivable-Dr. Dale Van Dyken Sales (To record the credit sales) $ 17,910 $ 9.920 Cost of goods sold Inventory (To record the cost of goods sold) $ 9,920 $ 4,670 $ 13,240 Jul-07 Cash Bad debt expense ($17,910-$4,670) Accounts Receivable-Dr. Dale Van Dyken (To record the receipt and bad debts expense) $ 17,910 $ 13,240 | Nov 02 Accounts Receivable-Dr. Dale Van Dyken Bad debts expense (To reinstate the account) $ 13,240 $ 13,240 Nov-02 Cash Accounts Receivable-Dr. Dale Van Dyken (To record the receipt of accounts receivable) $ 13,240