Bank Reconciliation and EntriesThe cash account for American Medical Co. at April 30 indicated a balance of $11,670. The bank statement indicated a balance of $13,640 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:Checks outstanding totaled $4,910.A deposit of $5,120, representing receipts of April 30, had been made too late to appear on the bank statement.The bank collected $2,660 on a $2,520 note, including interest of $140.A check for $770 returned with the statement had been incorrectly recorded by American Medical Co. as $700. The check was for the payment of an obligation to Targhee Supply Co. for a purchase on account.A check drawn for $40 had been erroneously charged by the bank as $400.Bank service charges for April amounted to $50.Required:1. Prepare a bank reconciliation.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.3. If a balance sheet is prepared for American Medical Co. on April 30, what amount should be reported as cash?

Bank Reconciliation Statement is a statement prepared to reconcile the difference between the…

Answered: Bank Reconciliation and Entries The…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Question

Bank Reconciliation and Entries

The cash account for American Medical Co. at April 30 indicated a balance of $11,670. The bank statement indicated a balance of $13,640 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:

Checks outstanding totaled $4,910.
A deposit of $5,120, representing receipts of April 30, had been made too late to appear on the bank statement.
The bank collected $2,660 on a $2,520 note, including interest of $140.
A check for $770 returned with the statement had been incorrectly recorded by American Medical Co. as $700. The check was for the payment of an obligation to Targhee Supply Co. for a purchase on account.
A check drawn for $40 had been erroneously charged by the bank as $400.
Bank service charges for April amounted to $50.

Required:

1. Prepare a bank reconciliation.

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.

3. If a balance sheet is prepared for American Medical Co. on April 30, what amount should be reported as cash?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions