The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $
ID: 2573364 • Letter: T
Question
The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $14,110. The bank statement indicated a balance of $16,730 on June 30, 20Y1. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:
Checks outstanding totaled $6,020.
A deposit of $6,270, representing receipts of June 30, had been made too late to appear on the bank statement.
The bank collected $3,260 on a $3,100 note, including interest of $160.
A check for $880 returned with the statement had been incorrectly recorded by Pala Medical Co. as $800. The check was for the payment of an obligation to Skyline Supply Co. for a purchase on account.
A check drawn for $30 had been erroneously charged by the bank as $300.
Bank service charges for June amounted to $40.
1. Prepare a bank reconciliation.
Adjusted balance
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.
Cash
3. If a balance sheet were prepared for Pala Medical Co. on June 30, 20Y1, what amount should be reported as cash?
$
Pala Medical Co. Bank Reconciliation June 30, 20Y1 Cash balance according to bank statement $ Adjustments: Deposit of June 30, not recorded by bank $ Bank error in charging check as $300 instead of $30 Outstanding checks Total adjustments Adjusted balance $ Cash balance according to company's records $ Adjustments: Proceeds of note collected by bank, including $160 interest $ Error in recording check. Bank service charges Total adjustmentsAdjusted balance
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. 20Y1 June 30 Cash Notes Receivable Interest Revenue b. June 30 Accounts Payable-Skyline Supply Co. Miscellaneous ExpenseCash
3. If a balance sheet were prepared for Pala Medical Co. on June 30, 20Y1, what amount should be reported as cash?
$
Explanation / Answer
Answer:
1
Pala Medical Co.
Bank Reconciliation
June 30, 20Y1
Cash balance according to bank statement
16730
Adjustments:
Add:
Deposit of June 30, not recorded by bank
6270
Bank error in charging check as $300 instead of $30
270
Less:
Outstanding checks
6020
Total adjustments
520
Adjusted balance
17250
Cash balance according to company's records
14110
Adjustments:
Add:
Proceeds of note collected by bank, including $160 interest
3260
Less:
Error in recording check. (880-800)
80
Bank service charges
40
Total adjustments
3140
Adjusted balance
17250
__________________________________________________-
2
2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed
Date
Description
Debit $
Credit $
a. 20Y1 June 30
Cash
3260
Notes Receivable
3100
Interest Revenue
160
b. June 30
Accounts Payable-Skyline Supply Co.
80
Miscellaneous Expense
40
Cash
120
________________________________________________________________
3
If a balance sheet were prepared for Pala Medical Co. on June 30, 20Y1, what amount should be reported as cash?
Answer: $17,250
Pala Medical Co.
Bank Reconciliation
June 30, 20Y1
Cash balance according to bank statement
16730
Adjustments:
Add:
Deposit of June 30, not recorded by bank
6270
Bank error in charging check as $300 instead of $30
270
Less:
Outstanding checks
6020
Total adjustments
520
Adjusted balance
17250
Cash balance according to company's records
14110
Adjustments:
Add:
Proceeds of note collected by bank, including $160 interest
3260
Less:
Error in recording check. (880-800)
80
Bank service charges
40
Total adjustments
3140
Adjusted balance
17250
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.