seed balance: e cash account for Amerkan Medical da at April 30 indicated a bala

Question

seed balance: e cash account for Amerkan Medical da at April 30 indicated a balance of SSHye The bank statement indicated a balance of 8588,600 on Apeil 30. Comparing the bank statement and the accompanying canceled checks and memos with the recornds revealed the following reconciling itemsc Checks outstanding 0otaled 861,280. b. A deposit of $42,500, repeesensing receipts of April 30, had been made too late to appear on the bank statement The bank collected $42,000 on a $40,000 note, including interest of $2,000. d. A check for $7,600 retumed with the statement had been incorrectly recorded by American Medical Co as $760. The check was for the payment of an obligation to Targhee Supply Co. for a purchase on account e. A check drawn for $240 had been eroncously charged by the bank as $420 E Bank service charges for April amounted to S145 Instructions 1. Prepare a bank reconciliation 2. Journalize the necessary entries. The accounts have not been dlosed. 3. If a balance sheet is prepared for American Medical Co, on April 30, what amount should he reported as cashe

Explanation / Answer

Journal:

3. Amount reported in the balance sheet= true cash balance= 370000

Bank statement: Ending balance as per bank statement        3,88,600 Additions: Deposit in transit #         42,500 Bank error               180 Deductions: Check in transit #        -61,280 True cash balance        3,70,000 Company books: Ending balance as per cash account        3,34,985 Additions: Note collected by bank         40,000 Interest on note collected            2,000 Incorrectly recorded check               760 Deductions: Service charge             -145 Check returned          -7,600 True cash balance        3,70,000

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