Bank Reconciliation and Entries The cash account for Pala Medical Co. at June 30
ID: 2558205 • Letter: B
Question
Bank Reconciliation and Entries The cash account for Pala Medical Co. at June 30, 20Y?, indicated a balance of $11,260. The bank statement indicated a balance of $13,270 on June 30, 20Y1?Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items a. Checks outstanding totaled $4,780. b. A deposit of $4,980, representing receipts of June 30, had been made too late to appear on the bank statement. c The bank collected $2,590 on a $2,450 note, including interest of $140 d. A check for $660 returned with the statement had been incorectly recorded by Pala Medical Co. as $600 The check was or the payment of an obligation to Shoe Supply Co. for a purchase on account. e. A check drawn for $30 had been erroneously charged by the bank as $300. f. Bank service charges for June amounted to $50. Required: 1. Prepare a bank reconciliation Pala Medical Co Bank Reconciliation Cash balance according to bank statement 13,270 Outstanding checks 870 Total adjustments Adjusted basance Cash balance acconding to company's recordsExplanation / Answer
1) Bank Reconciliation Cash balance according to bank statement $ 13,270 Adjustments: Check outstanding $ (4,780) Deposits $ 4,980 Incorrect charge on cheque issued $ 270 Total Adjustments $ 470 Adjusted balance $ 13,740 Cash balance according to company's records $ 11,260 Adjustments: Note collection $ 2,590 Incorrect entry $ (60) Bank service charges $ (50) Total Adjustments $ 2,480 Adjusted balance $ 13,740 2)a) Cash $ 2,590 Notes receivable $ 2,450 Interest income $ 140 b) Bank charges $ 50 Accounts payable $ 60 Cash $ 110 3) Amount should be reported as cash $ 13,740
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