Bank reconciliation and entriesThe cash account for Pala Medical Co. at June 30, 20Y1, indicated abalance of $166,436. The bank statement indicated a balance of $195,688on June 30, 20Y1. Comparing the bank statement and the accompanyingcanceled checks and memos with the records revealed the followingreconciling items:A. Checks outstanding totaled $19,427.B. A deposit of $12,300, representing receipts of June 30, had beenmade too late to appear on the bank statement.C. The bank collected $26,500 on a $25,000 note, including interestof $1,500. D. A check for $4,000 returned with the statement had been incorrectly recorded by Pala Medical Co. as $400. Thecheck was for the payment of an obligation to Skyline Supply Co. for a purchase on account.E. A check drawn for $195 had been erroneously charged by the bank as $915.F. Bank service charges for June amounted to $55.Instructions1. Prepare a bank reconciliation.2. Journalize the necessary entries.3. If a balance sheet were prepared for Pala Medical Co. on June 30, 20Y1, what amount should be reported as cash?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Bank reconciliation and entries
The cash account for Pala Medical Co. at June 30, 20Y1, indicated a
balance of $166,436. The bank statement indicated a balance of $195,688
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 $19,427.
B. A deposit of $12,300, representing receipts of June 30, had been
made too late to appear on the bank statement.
C. The bank collected $26,500 on a $25,000 note, including interest
of $1,500.

D. A check for $4,000 returned with the statement had been incorrectly recorded by Pala Medical Co. as $400. The
check was for the payment of an obligation to Skyline Supply Co. for a purchase on account.
E. A check drawn for $195 had been erroneously charged by the bank as $915.
F. Bank service charges for June amounted to $55.
Instructions
1. Prepare a bank reconciliation.
2. Journalize the necessary entries.
3. If a balance sheet were prepared for Pala Medical Co. on June 30, 20Y1, what amount should be reported as cash?

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