The cash account for Capstone Medical Co. at November 30, 2016, indicated a bala

Question

The cash account for Capstone Medical Co. at November 30, 2016, indicated a balance of $89,620. The bank statement indicated a balance of $128,660 on November 30, 2016. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:

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. Whenever there is more than one adjusting item in the bank portion of the reconciliation or the general ledger portion of the bank reconciliation, enter in the order presented in the instructions.

Score: 14/87

CAPSTONE MEDICAL CO.

Bank Reconciliation

November 30, 2016

1

Cash balance according to bank statement

2

3

4

5

6

Adjusted balance

7

8

Cash balance according to company’s records

9

10

11

12

13

Adjusted balance

2. Journalize the necessary entries. The accounts have not been closed. Refer to the Chart of Accounts for exact wording of account titles.

Question not attempted.

PAGE 1

JOURNAL

Score: 0/75

1

2

3

4

5

6

If a balance sheet were prepared for Capstone Medical Co. on November 30, 2016, what amount should be reported as cash?

A. Checks outstanding totaled $32,700. B. A deposit of $18,550, representing receipts of November 30, had been made too late to appear on the bank statement. C. The bank collected $26,750 on a $25,000 note, including interest of $1,750. D. A check for $1,500 returned with the statement had been incorrectly recorded by Capstone Medical Co. as $150. The check was for the payment of an obligation to ABC Supply Co. for a purchase on account. E. A check drawn for $490 had been erroneously charged by the bank as $940. F. Bank service charges for November amounted to $60.

Explanation / Answer

1)Capstone Medical Co. Bank Reconcilation Statement

2) Entries

Bank A/c----------------------------------------Dr

To Notes Receivable A/c

To Interest on Notes receivable A/c

(Bieng Notes Collected by Bank with interest)

26750

25000

1750

ABC Supply Co----------------------------------------Dr

To Bank A/c

(Error in ceck recording now rectified1500-150)

1350

Bank Service Charges A/c--------------------------------Dr

To Bank /c

(being services charges charged by bank)

60

3)In Balnce Sheet Amount should be reported as =89620+26750-1350-60=114960

1)Capstone Medical Co. Bank Reconcilation Statement

Particulars Amount(in$) Amount(in$) Balance As per Bank Book 128660 Add: Error in recording Nov 30 Deposit 18550 Bank Error in charging check as $940 instead of $490 450 Bank Service charges 60 19060 adjusted balance of Bank book 147720 Balance as per Cash Book 89620 Add: Out standing Checks 32700 Proceeds of note collected by bank including interest of 1750 26750 59450 Deduct:- Error in recordiong Check -1350    Adjusted balance of Cash Book 147720

2) Entries

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