Bank Reconciliation and EntriesThe cash account for American Medical Co. at April 30 indicated a balance of $11,630. The bank statement indicated a balance of $13,480 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 $4,850.A deposit of $5,060, representing receipts of April 30, had been made too late to appear on the bank statement.The bank collected $2,630 on a $2,490 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 $50 had been erroneously charged by the bank as $500.Bank service charges for April amounted to $50.Required: Required:1. Prepare a bank reconciliation.American Medical Co.Bank ReconciliationApril 30Cash balance according to bank statementAdjusted balanceCash balance according to company's recordsAdjusted balance2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. For a compound transaction, if anamount box does not require an entry, leave it blank.a. April 30b. April 30 Apii 30Cash balance according to bank statementAdjusted balanceCash balance according to company's recordsAdjusted balance2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. For a compound transaction, if anamount box does not reguire an entry, leave it blank.a. April 30b. April 303. If a balance sheet is prepared for American Medical Co. on April 30, what amount should be reported as cash?

Bank reconciliation statement: Bank reconciliation statement is a statement prepared by the account…

Answered: Cash balance according to bank…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Bank Reconciliation and Entries

The cash account for American Medical Co. at April 30 indicated a balance of $11,630. The bank statement indicated a balance of $13,480 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 $4,850.
A deposit of $5,060, representing receipts of April 30, had been made too late to appear on the bank statement.
The bank collected $2,630 on a $2,490 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 $50 had been erroneously charged by the bank as $500.
Bank service charges for April amounted to $50.

Required:

Apii 30
Cash balance according to bank statement
Adjusted balance
Cash balance according to company's records
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 reguire an entry, leave it blank.
a. April 30
b. April 30
3. If a balance sheet is prepared for American Medical Co. on April 30, what amount should be reported as cash?

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