The cash account for American Medical Co. at April 30 indicated a balance of $10,405. The bank statement indicated a balance of $12,130 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: a. Checks outstanding totaled $4,370. b. A deposit of $4,550, representing receipts of April 30, had been made too late to appear on the bank statement. c. The bank collected $2,370 on a $2,240 note, including interest of $130. d. 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. e. A check drawn for $40 had been erroneously charged by the bank as $400. f. Bank service charges for April amounted to $35. Required: 1. Prepare a bank reconciliation. American Medical Co. Bank Reconciliation April 30 Cash balance according to bank statement Add deposit of April 30, not recorded by bank Add bank error in chargingq check as $400 instead of $40 Deduct bank error in charging check as $400 instead of $40 Adjusted balance Cash balance according to company's records Add note and interest collected by bank Deduct outstanding checks Adjusted balance
The cash account for American Medical Co. at April 30 indicated a balance of $10,405. The bank statement indicated a balance of $12,130 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: a. Checks outstanding totaled $4,370. b. A deposit of $4,550, representing receipts of April 30, had been made too late to appear on the bank statement. c. The bank collected $2,370 on a $2,240 note, including interest of $130. d. 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. e. A check drawn for $40 had been erroneously charged by the bank as $400. f. Bank service charges for April amounted to $35. Required: 1. Prepare a bank reconciliation. American Medical Co. Bank Reconciliation April 30 Cash balance according to bank statement Add deposit of April 30, not recorded by bank Add bank error in chargingq check as $400 instead of $40 Deduct bank error in charging check as $400 instead of $40 Adjusted balance Cash balance according to company's records Add note and interest collected by bank Deduct outstanding checks Adjusted balance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![**Bank Reconciliation Explanation and Form**
The cash account for American Medical Co. at April 30 indicated a balance of $10,405, whereas the bank statement indicated a balance of $12,130. A comparison between the bank statement and the corresponding records identified the following reconciling items:
1. Checks outstanding totaled $4,370.
2. A deposit of $4,550 (receipts of April 30) was made too late to appear on the bank statement.
3. The bank collected $2,370 on a $2,240 note, including $130 interest.
4. A check for $770 was incorrectly recorded by American Medical Co. as $700. The check related to a payment to Targhee Supply Co. for an earlier purchase.
5. The bank incorrectly charged $40 as $400.
6. Bank service charges for April were $35.
**Required:**
1. Prepare a bank reconciliation.
**American Medical Co.
Bank Reconciliation - April 30**
- **Cash balance according to bank statement:** `$______`
- **Add deposit of April 30, not recorded by bank:** `$______`
- **Add bank error in charging check as $400 instead of $40:** `$______`
- **Deduct bank error in charging check as $400 instead of $40:** `$______`
- **Adjusted balance:** `$______`
- **Cash balance according to company's records:** `$______`
- **Add note and interest collected by bank:** `$______`
- **Deduct outstanding checks:** `$______`
- **Adjusted balance:** `$______`
This template outlines the standard procedure for completing a bank reconciliation to ensure the accuracy of financial records by adjusting discrepancies between cash balances per the bank and company records.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff1f5af04-8287-4d13-a22c-6d4fe42fe9ce%2F2a21edab-ad7f-414b-b252-0a4ce519b3bb%2F632zhru_processed.png&w=3840&q=75)
Transcribed Image Text:**Bank Reconciliation Explanation and Form**
The cash account for American Medical Co. at April 30 indicated a balance of $10,405, whereas the bank statement indicated a balance of $12,130. A comparison between the bank statement and the corresponding records identified the following reconciling items:
1. Checks outstanding totaled $4,370.
2. A deposit of $4,550 (receipts of April 30) was made too late to appear on the bank statement.
3. The bank collected $2,370 on a $2,240 note, including $130 interest.
4. A check for $770 was incorrectly recorded by American Medical Co. as $700. The check related to a payment to Targhee Supply Co. for an earlier purchase.
5. The bank incorrectly charged $40 as $400.
6. Bank service charges for April were $35.
**Required:**
1. Prepare a bank reconciliation.
**American Medical Co.
Bank Reconciliation - April 30**
- **Cash balance according to bank statement:** `$______`
- **Add deposit of April 30, not recorded by bank:** `$______`
- **Add bank error in charging check as $400 instead of $40:** `$______`
- **Deduct bank error in charging check as $400 instead of $40:** `$______`
- **Adjusted balance:** `$______`
- **Cash balance according to company's records:** `$______`
- **Add note and interest collected by bank:** `$______`
- **Deduct outstanding checks:** `$______`
- **Adjusted balance:** `$______`
This template outlines the standard procedure for completing a bank reconciliation to ensure the accuracy of financial records by adjusting discrepancies between cash balances per the bank and company records.
![**Journalizing Cash Entries and Preparing a Balance Sheet**
**2. Journalize the necessary entries:**
(a) Entries that increase cash.
(b) Entries that decrease cash.
(Note: The accounts have not been closed. For a compound transaction, if an amount box does not require an entry, leave it blank.)
- **a. April 30:**
- [Dropdown] [Text Box] [Text Box]
- [Dropdown] [Text Box] [Text Box]
- **b. April 30:**
- [Dropdown] [Text Box] [Text Box]
- [Dropdown] [Text Box] [Text Box]
**3. Preparing a Balance Sheet:**
If a balance sheet is prepared for American Medical Co. on April 30, what amount should be reported as cash?
- $ [Text Box]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff1f5af04-8287-4d13-a22c-6d4fe42fe9ce%2F2a21edab-ad7f-414b-b252-0a4ce519b3bb%2Fd6a2fbe_processed.png&w=3840&q=75)
Transcribed Image Text:**Journalizing Cash Entries and Preparing a Balance Sheet**
**2. Journalize the necessary entries:**
(a) Entries that increase cash.
(b) Entries that decrease cash.
(Note: The accounts have not been closed. For a compound transaction, if an amount box does not require an entry, leave it blank.)
- **a. April 30:**
- [Dropdown] [Text Box] [Text Box]
- [Dropdown] [Text Box] [Text Box]
- **b. April 30:**
- [Dropdown] [Text Box] [Text Box]
- [Dropdown] [Text Box] [Text Box]
**3. Preparing a Balance Sheet:**
If a balance sheet is prepared for American Medical Co. on April 30, what amount should be reported as cash?
- $ [Text Box]
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